AC665 Integration AC665 R/3 System Release 46C 04/26/2001 0 AC665 Integration......................................................................................................................................................... 0-1 Copyright .................................................................................................................................................................. 0-2 Enterprise Controlling ........................................................................................................................................... 0-4 Course Prerequisites .............................................................................................................................................. 0-5 Target group .......................................................................................................................................................... 0-6 Course Goal .......................................................................................................................................................... 0-7 Course Objectives ................................................................................................................................................. 0-8 Course Content ...................................................................................................................................................... 0-9 Main Business Scenario ...................................................................................................................................... 0-10 Course Overview Diagram .................................................................................................................................. 0-11 Group Control: Procedures and Infrastructure .......................................................................................................... 1-1 Group Control: Procedures and Infrastructure Unit Objectives ............................................................................ 1-2 Course Overview Diagram .................................................................................................................................... 1-3 Group Control: Procedures and Infrastructure Business Scenario ........................................................................ 1-4 Managing a Global Enterprise .............................................................................................................................. 1-5 Strategy: Decentralizing Responsibility ................................................................................................................ 1-6 Consolidation: Requirements ................................................................................................................................ 1-7 Enterprise Controlling ........................................................................................................................................... 1-8 Strategic Enterprise Management ......................................................................................................................... 1-9 SAP Consolidation - Future Development .......................................................................................................... 1-10 EC-CS: Functions ............................................................................................................................................... 1-11 Model Group: IDES ............................................................................................................................................ 1-12 Strategic Business Unit ....................................................................................................................................... 1-13 Enterprise Structure and Consolidation Type ..................................................................................................... 1-14 Profit Center Consolidation ................................................................................................................................. 1-15 Data Stream ......................................................................................................................................................... 1-16 Performance Key Figures in the Model Group ................................................................................................... 1-17 Group Control: Procedures and Infrastructure Unit Summary ............................................................................ 1-18 Exercise Data ...................................................................................................................................................... 1-19 Group Control-Solutions ..................................................................................................................................... 1-29 Integrated Data Transfer: FI ...................................................................................................................................... 2-1 Integrated Data Transfer: FI Unit Objectives ........................................................................................................ 2-2 Course Overview Diagram .................................................................................................................................... 2-3 Integrated Data Transfer: FI Business Scenario ................................................................................................... 2-4 Integration of Master Data .................................................................................................................................... 2-5 EC-CS: Data Structures......................................................................................................................................... 2-6 Organizational Structures ...................................................................................................................................... 2-7 Consolidation Dimension and Hierarchies ............................................................................................................ 2-8 Business Area Consolidation ................................................................................................................................ 2-9 Versions .............................................................................................................................................................. 2-10 Ledger and Currency ........................................................................................................................................... 2-11 Consolidation Chart of Accounts ........................................................................................................................ 2-12 Chart and Breakdown Category .......................................................................................................................... 2-13 Subitems .............................................................................................................................................................. 2-14 Global Session Parameters .................................................................................................................................. 2-15 Financial Accounting .......................................................................................................................................... 2-16 Preparation in FI.................................................................................................................................................. 2-17 IMG Settings: Different Systems ........................................................................................................................ 2-18 FI: Organizational Elements ............................................................................................................................... 2-19 Assignment: Company Code - Company ............................................................................................................ 2-20 Additional Account Assignment: Business Area ................................................................................................ 2-21 Assignments: Asset Master Record..................................................................................................................... 2-22 Trading Partner Information: FI .......................................................................................................................... 2-23 Preparation in FI: Document Type ...................................................................................................................... 2-24 Company Code Assignment: Business Area ....................................................................................................... 2-25 Consolidation Business Area .............................................................................................................................. 2-26 Preparation for Business Area Consolidation ..................................................................................................... 2-27 Business Area Adjustment .................................................................................................................................. 2-28 Transaction Types ............................................................................................................................................... 2-29 Preparation in FI: Functional Areas .................................................................................................................... 2-30 Preparations: Controlling .................................................................................................................................... 2-31 Preparations: Materials Management .................................................................................................................. 2-32 Preparations: Sales .............................................................................................................................................. 2-33 Integrated Data Transfer: FI Unit Summary ...................................................................................................... 2-34 Integrated Data Transfer-Exercises ..................................................................................................................... 2-35 Integrated Data Transfer-Solutions ..................................................................................................................... 2-42 Data Transfer Methods: FI Data................................................................................................................................ 3-1 Data Transfer Methods: FI Data Unit Objectives.................................................................................................. 3-2 Course Overview Diagram .................................................................................................................................... 3-3 Data Transfer Methods: FI Data Business Scenario.............................................................................................. 3-4 Consolidation With Different Releases ................................................................................................................. 3-5 Data Transfer Methods .......................................................................................................................................... 3-6 Prepare Data Transfer ........................................................................................................................................... 3-7 Sender System: Data Transfer Method ................................................................................................................. 3-8 Realtime Update .................................................................................................................................................... 3-9 Rollups ................................................................................................................................................................ 3-10 Transferring Values from Transaction G/L Accounts ......................................................................................... 3-11 Creating a Group Chart of Accounts/Items ......................................................................................................... 3-12 FI Accounts / Secondary Cost Elements ............................................................................................................. 3-13 Periodic Extract ................................................................................................................................................... 3-14 Transaction Accounts - Periodic Extract ............................................................................................................. 3-15 Data Transfer Methods Periodic Extract ............................................................................................................. 3-16 Assigning Consolidation Types to Dimensions .................................................................................................. 3-17 Converting Organizational Units ........................................................................................................................ 3-18 Organizational Units: Rules for ID Combination ................................................................................................ 3-19 Maintaining Hierarchies ...................................................................................................................................... 3-20 Realtime Updates: Defining Document Types .................................................................................................... 3-21 Defining Data Streams ........................................................................................................................................ 3-22 Data Transfer Methods: FI Data Unit Summary ................................................................................................. 3-23 Data Transfer methods-Exercises........................................................................................................................ 3-24 Data Transfer methods-Solutions ........................................................................................................................ 3-33 Consolidation Activities and Reporting .................................................................................................................... 4-1 Consolidation Activities and Reporting: Unit Objectives ..................................................................................... 4-2 Course Overview Diagram .................................................................................................................................... 4-3 Consolidation Activities and Reporting: Business Scenario ................................................................................. 4-4 Preparing Consolidation Activities and Reporting ................................................................................................ 4-5 Carrying Forward Balances ................................................................................................................................... 4-6 Methods of Transferring Data to EC-CS ............................................................................................................... 4-7 EC-CS: Entering Additional Financial Data ......................................................................................................... 4-8 Determining Contra Items ..................................................................................................................................... 4-9 Calculating Retained Earnings: Selected Items ................................................................................................... 4-10 Validation ............................................................................................................................................................ 4-11 Currency Translation ........................................................................................................................................... 4-12 Data Monitor ....................................................................................................................................................... 4-13 Consolidation Monitor ........................................................................................................................................ 4-14 Interunit Elimination ........................................................................................................................................... 4-15 Document Matching ............................................................................................................................................ 4-16 Information System ............................................................................................................................................. 4-17 Consolidation Activities and Reporting: Unit Summary..................................................................................... 4-18 Exercises ............................................................................................................................................................. 4-19 Solutions ............................................................................................................................................................. 4-21 Integrated Data Transfer: EC-PCA ........................................................................................................................... 5-1 Integrated Data Transfer: EC-PCA Unit Objectives ............................................................................................. 5-2 Course Overview Diagram .................................................................................................................................... 5-3 Integrated Data Transfer: EC-PCA Business Scenario ......................................................................................... 5-4 Data Stream ........................................................................................................................................................... 5-5 Profit Center Hierarchy ......................................................................................................................................... 5-6 Global Settings: Profit Center ............................................................................................................................... 5-7 Profit Center: Master Record ................................................................................................................................ 5-8 Profit Center Assignment ...................................................................................................................................... 5-9 Profit Center Origin: Asset Master Record ......................................................................................................... 5-10 CO and FI Reconciliation.................................................................................................................................... 5-11 Preparation for Profit Center Consolidation ........................................................................................................ 5-12 Global Session Parameters .................................................................................................................................. 5-13 Profit Center Consolidation: Hierarchy ............................................................................................................... 5-14 Partner Relationships: EC-PCA .......................................................................................................................... 5-15 Logistics: Partner Profit Center ........................................................................................................................... 5-16 LO Partner Assignment: One-Client System ...................................................................................................... 5-17 Balance Sheet Profit Centers ............................................................................................................................... 5-18 Profit Center: Additional Balance Sheet Accounts ............................................................................................. 5-19 EC-PCA Preparing Data: Unit Summary ............................................................................................................ 5-20 Integrated Data Transfer: EC-PCA Exercises .5-21 Integrated Data Transfer-Solutions ..................................................................................................................... 5-23 Data Transfer Methods: EC-PCA ............................................................................................................................. 6-1 Data Transfer Methods: EC-PCAUnit Objectives ................................................................................................ 6-2 Course Overview Diagram .................................................................................................................................... 6-3 Data Transfer Methods: EC-PCABusiness Scenario ............................................................................................ 6-4 Assigning Consolidation Types to Dimensions .................................................................................................... 6-5 Converting Organizational Units .......................................................................................................................... 6-6 Organizational Units: Rules for ID Combination .................................................................................................. 6-7 Transferring/Editing Hierarchies........................................................................................................................... 6-8 EC-PCA: Transferring FS Items / Data ................................................................................................................. 6-9 Transfer Data: Defining Data Streams ................................................................................................................ 6-10 Standard Rollup................................................................................................................................................... 6-11 Rollup Header ..................................................................................................................................................... 6-12 Rollup Header: Reset Set .................................................................................................................................... 6-13 Rollup Header: Defining The Rollup Set ............................................................................................................ 6-14 Rollup Sequence ................................................................................................................................................. 6-15 Standard Exits ..................................................................................................................................................... 6-16 Field Transfer and Standard Exits ....................................................................................................................... 6-17 Rollup in Different Systems ................................................................................................................................ 6-18 Data Transfer Methods: EC-PCAUnit Summary ................................................................................................ 6-19 Exercises ........................................................................................................................................6-20 Data Transfer methods-Solutions ........................................................................................................................ 6-25 Key Figures ............................................................................................................................................................... 7-1 Key Figures: Topic Objectives .............................................................................................................................. 7-2 Course Overview Diagram .................................................................................................................................... 7-3 Key Figures: Business Scenario ............................................................................................................................ 7-4 EC-CS Reporting .................................................................................................................................................. 7-5 Reporting............................................................................................................................................................... 7-6 Technique for Cash Flow Reports ......................................................................................................................... 7-7 Performance Key Figures in the Model Group ..................................................................................................... 7-8 Performance Key Figures I ................................................................................................................................... 7-9 Performance Key Figures II ................................................................................................................................ 7-10 Key Figures in the Consolidated Chart of Accounts ........................................................................................... 7-11 Reconciliation of FI and PCA Results in EC-CS ................................................................................................ 7-12 Key Figure ROA - Report in EC-CS ................................................................................................................... 7-13 Performance Key Figures: Trends....................................................................................................................... 7-14 EVA®: Influencing Factors ................................................................................................................................ 7-15 Task Distribution: Controlling / Group Accounting ........................................................................................... 7-16 EVA® with SAP EC-EIS and inSight ................................................................................................................ 7-17 EVA®: Weighted Average Cost of Capital ........................................................................................................ 7-18 Key Figures: Unit Summary ............................................................................................................................... 7-19 Key figures-Exercises ......................................................................................................................................... 7-20 Key Figures-Solutions ......................................................................................................................................... 7-21 Appendix ................................................................................................................................................................... 8-1 Example: LO Integration with FI and EC-PCA .................................................................................................... 8-2 Example: LO Integration with FI and EC-PCA .................................................................................................... 8-3 Purchase Order ...................................................................................................................................................... 8-4 Delivery and Picking ............................................................................................................................................. 8-5 Goods Issue ........................................................................................................................................................... 8-6 Goods Receipt ....................................................................................................................................................... 8-7 Invoicing ............................................................................................................................................................... 8-8 Incoming Invoice .................................................................................................................................................. 8-9 - ........................................................................................................................................................................... 8-10 AC665 Integration AC665 EC-CS Integration SAP AG 1999 SAP AG R/3 Release 4.6B December 1999 Material number 5003 5819 Copyright Copyright 2001 SAP AG. All rights reserved. Neither this training manual nor any part thereof may be copied or reproduced in any form or by any means, or translated into another language, without the prior consent of SAP AG. The information contained in this document is subject to change and supplement without prior notice. All rights reserved. SAP AG 1999 Trademarks: Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft®, WINDOWS®, NT®, EXCEL®, Word® and SQL Server® are registered trademarks of Microsoft Corporation. IBM®, DB2®, OS/2®, DB2/6000®, Parallel Sysplex®, MVS/ESA®, RS/6000®, AIX®, S/390®, AS/400®, OS/390®, and OS/400® are registered trademarks of IBM Corporation. ORACLE® is a registered trademark of ORACLE Corporation, California, USA. INFORMIX®-OnLine for SAP and Informix® Dynamic ServerTM are registered trademarks of Informix Software Incorporated. 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Design: SAP Communications Media Enterprise Controlling Level 2 Level 3 E C - E I S: Executive Information System E C - B P: Business Planning AC615 4.6b B 2 days Executive Information System (EIS) 1 Reporting AC625 4.6b B 1 day Executive Information System (EIS) 3 Business Planning AC620 4.6b B 2 days Executive Information System (EIS) 2 Setting up the system E C - P C A: Profit Center Accounting AC040 A 5 days Cost Management and Controlling AC610 B 2 days Profit Center Accounting Capital Consolidation E C - C S: Consolidation AC660 B 5 days EC-CS: Consolidation functions AC010 C 5 days Financial Accounting and Reporting SAP AG 1999 AC205 C 2 days Financial Closing AC665 3 days EC-CS: Integration C 5 days AC220 Special Purpose Ledger A Controlling B Enterprise Controlling C Financial Accounting Course Prerequisites Required Knowledge of business processes Basic knowledge of accounting: individual financial statements and consolidation Recommended SAP20 - Overview of SAP R/3 AC010 - Overview of External Accounting AC660 - Consolidation Functions SAP AG 1999 Target group Participants: Project managers, project teams Consultants Duration: 3 days SAP AG 1999 Remarks This course material is not intended for self teaching programs. The course is only complete in conjuction with the instructor's explanations. This is why there is sufficient space for your notes. Course Goal At the conclusion of this course, you will be able to: Configure and prepare the R/3 component for consolidation Understand SAP terminology Understand how integration between EC-CS and EC-PCA / FI works Understand financial key figures that can be calculated using consolidated data SAP AG 1999 Course Objectives At the conclusion of this course, you will be able to Configure the sender and receiver systems Create EC-CS master data using the link to FI charts of accounts/EC-PCA profit center hierarchies Use the integrated environment to transfer values for individual financial statements from the transaction systems Work through consolidation steps resulting from the data integration Reconcile FI data with PCA data in the EC-CS component SAP AG 1999 Course Content Preface Unit 1 Group Control: Procedures and Infrastructure Unit 5 Integrated Data Transfer: EC-PCA Unit 2 Integrated Data Transfer: FI Unit 6 Data Transfer Methods: EC-PCA Unit 3 Data Transfer Methods: FI Data Unit 7 Key Figures Unit 4 Consolidation Activities and Reporting Exercises Solutions Appendix SAP AG 1999 Main Business Scenario You are a consultant for the consolidation department of your enterprise. As a member of the project team, your task is to configure the system for consolidation so that the various options for transferring data from FI or ECPCA can be utilized optimally. Next, you test the integrated environment, and show the project team various techniques for transferring data. You will then test the consolidation of the data, and use the high level of data integration to calculate key figures from the consolidated data. SAP AG 1999 Course Overview Diagram EIS Executive Information System BP Business Planning EC-CS Consolidation Dimension FI Data PCA Data EC-PCA Profit Center Accounting FI-GL General Ledger SAP AG 1999 CO Controlling Group Control: Procedures and Infrastructure Contents Requirements for Consolidation Systems The IDES Model Group SAP AG 1999 (C) SAP AG AC665 1-1 Group Control: Procedures and Infrastructure Unit Objectives At the conclusion of this unit, you will be able to: Describe reasons for consolidation within a corporate group Name various consolidation types Name the various organizational structures of the EC-CS components Choose the consolidation dimension using the session parameters SAP AG 1999 (C) SAP AG AC665 1-2 Course Overview Diagram EIS BP Executive Business Information Planning System EC-CS Consolidation Dimension FI Data PCA Data EC-PCA Profit Center Accounting FI-GL General Ledger SAP AG 1999 (C) SAP AG AC665 1-3 CO Controlling Group Control: Procedures and Infrastructure Business Scenario Your task is to hierarchically organize a complex company structure for the group dimension, and to prepare the data from individual subsidiaries for consolidated financial statements. Before transferring the data from the sender systems, you want an overview of the functionality offered by the EC-CS component. You will then determine the various consolidation types for which you require the data from the sender systems. SAP AG 1999 (C) SAP AG AC665 1-4 Managing a Global Enterprise E F USA D J ? MEX Enterprise Management AR How can we manage the activities of our enterprise in various countries and markets, operate locally, and promote the global strategy of the group? SAP AG 1999 Complex group structures have to be managed effectively. At the same time, increasing globalization requires decentralized group management for independent organizational units. Business units that are close to the market have to be managed decentrally in order to leverage their full market potential. (C) SAP AG AC665 1-5 Global process optimization allows synergies (know-how, core competencies) to be detected more quickly and used more efficiently in the group. New business concepts can be transferred from one unit to another. Enterprise goals are increasingly being set "from the outside" - by shareholders, for example. Enterprise management now has the task of implementing these goals internally. The corporate group head office calculates key figures and defines goals for the strategic business entities. Here, non-monetary success factors also have an influence: the group has the relevant information earlier, and no longer has to wait until effects are seen in P&L. Formerly, external and internal accounting were usually separate (for example, due to different valuation methods). Nowadays, the goal is to unite external and internal accounting, since the requirements for legal consolidation also comprise a certain amount of information relevant to cost accounting. The enterprise is controlled according to internal enterprise structures that can be very detailed. This means that extremely flexible structures are necessary. The company is no longer the basis of consolidation in all areas. (C) SAP AG AC665 1-6 Consolidation: Requirements External Group Reporting / Consolidation Reporting procedure in accordance with international reporting regulations: US GAAP, IAS... Internal Group Reporting / Consolidation Management consolidation: business areas, profit centers Various data categories, including actual data, budget, forecast Enterprise Key Figures Calculation at various hierarchy levels SAP AG 1999 Automatic creation of consolidated financial statements Flexible definition of consolidation methods In legal consolidation, the consolidation units are the legally independent companies. They report their individual financial statements to the group, which are used to compute the consolidated financial statement. In management consolidation, the consolidation areas can be profit centers or business areas. In the R/3 System, integrated data can be transferred directly from the transaction systems to consolidation. You can work with planned and budget values, or carry out simulations. The standard system includes all international consolidation methods that are commonly used. (C) SAP AG AC665 1-7 EC-EIS is the information system for senior management. Data from the various partial information systems inside and outside of the enterprise (accounting, human resources, controlling, and enterprise controlling) is grouped together to form a uniform dimension. Since this data is very heterogeneously structured, the data basis can be divided up into data areas that are self-contained from a business point of view. EC-BP: Actual/planned data, as well as investment requirements can be transferred from the transaction applications in the group, making it easier to determine planning data for the transaction units. EC-CS comprises general consolidation functions for external reporting, but also for the internal reporting structure in accordance with the internal management structure. Migration tools for migrating from FI-LC to EC-CS are available since March 2000. EC-CS consolidates 'financial data' from external and internal accounting. What is more, EC-EIS imports the critical control values for enterprise controlling from the logistics and human resource applications. General key figure reports in EC-EIS are complemented by EC-CS data in a highly aggregated form. The transferred EC-CS data are presented in EC-EIS in joint reports. EC-PCA provides information on profitability and capital tie-up in units that are responsible for earnings (profit centers). (C) SAP AG AC665 1-8 Strategic Enterprise Management BPS: Links strategic planning and SAP SEM business planning CPM: Balanced scorecards, management cockpit and key figure systems help an enterprise to fulfil its strategic goals SRM: Integrates the communication Stakeholder Relationship Management Corporate (SRM) Performance Monitor (CPM) Business Consolidation (BCS) Business Planning & Simulation (BPS) Business Information Collection (BIC) with the stakeholders SEM-BCS: Automates the consolidation process BIC: Supports the automatic acquisition of external and internal business information BW SAP AG 1999 Success is measured by the speed with which a business strategy can be realized. To optimize enterprise controlling SAP has developed the New Dimensions component Strategic Enterprise Management (SEM). One of the main advantages of SAP SEM is the support it offers to strategic management processes by linking strategic and operational actions. Internal control of an enterprise can be carried out using value-oriented management principles. (C) SAP AG AC665 1-9 SAP Consolidation - Future Development SAP Consolidation Engine R/3 OLTP Structures fixed Value Based Management Functions BW OLAP Structures partially flexible EC-CS Consolidation SEM-BCS Business Consolidation SAP AG 1999 SAP SEM is an analytical application and is based on complex OLAP and Data Warehouse technology (OLAP: Online Analytical Processing). The SAP consolidation engines used by both EC-CS and SEM-BCS contains all the consolidation functions. The consolidated data can be made available in the OLTP system (R/3 EC-CS) or in BW (SEM-BCS). Alternatively, reported data can in future be consolidated and analyzed in BW. In R/3 the EC-CS structures, both fixed and flexible (user definable), continue to be available and applicable in OLTP systems. OLTP (Online Transactional Processing): The data is stored in tables and is, to a certain extent, user definable. The Business Information Warehouse (BW) contains the business data, among other things the consolidated data. The data is contained in a multidimensional data cube (OLAP structure). (C) SAP AG AC665 1-10 Applications of EC-CS : Company consolidation Management consolidation Characteristics: Flexible hierarchies of consolidation units SAP integration for companies, business areas, profit centers Tools for online and offline data entry Flexible interfaces for subsidiaries with systems made by other manufacturers Powerful reporting functionality, drilldown to transaction SAP components International rules for reporting (US-GAAP, IAS) Versions for data categories, simulation, planning (C) SAP AG AC665 1-11 SBU: DIV: The IDES Strategic Business Unit Division model group is based in the USA. It comprises three enterprises: The corporate head office, IDES Palo Alto (company code C100, company C10000, business area Pharma) produces pharmaceuticals (analgesics and anti-diabetic agents) and delivers the antidiabetic agents to IDES New York for sale and distribution. IDES Chicago (company code C300, company C30000) operates in the business areas Chemicals and Services. The company supplies IDES Palo Alto and IDES New York with raw materials and packaging material from the business area Chemicals. IDES Chicago carries out market research in the business area Services, the results of which are sold to external companies and IDES Palo Alto. IDES New York (company code C200, company C20000, business area Pharma) sells and distributes the products manufactured by both companies. (C) SAP AG AC665 1-12 The IDES model group has divided its enterprises into the segments Pharma /Chemicals, Services, and Corporate and Others. The strategic business unit Pharma consists of two divisions: Painkillers, with the product lines ­ Mono (products AS and PCM) ­ Combo (compound preparations) Diabetical products, with the product lines ­ Human based insulin ­ Animal based Insulin The strategic business unit Pharma is represented by business area 6000, and by a node in the profit center hierarchy. This enables you, on the one hand, to create external reports according to international rules for reporting, and on the other to compare values from internal and external dimensions with one another. Since these business units supply each other, partner relationships have to be assigned to the transaction applications so that internal business volume, as well as payables and receivables can be eliminated at the group level. (C) SAP AG AC665 1-13 The internal structure of the enterprise is reflected in the organizational elements of external accounting (for a segment report procedure according to international rules). In EC-CS, three consolidation types are provided for use in integration with SAP transaction applications: Company consolidation Business area consolidation Profit center consolidation These consolidation types are displayed in dimensions. Dimensions allow various views of the consolidation data. These can be stored and managed separately for each dimension. A dimension can contain several hierarchies according to various statutory or internal requirements. For example, for a business area consolidation dimension: Reflect the business areas with reference to the legal companies Breakdown of the group according to group areas. The business object consolidation unit is the smallest unit in group structuring on the basis of which complete consolidation can be carried out. The business object consolidation group is an arbitrary grouping of several consolidation units for the purpose of consolidation and reporting. The consolidation units and groups are assigned hierarchically to a top consolidation group. A dimension comprises at least one hierarchy structure. (C) SAP AG AC665 1-14 Profit Center Consolidation Consolidated data SEG A Pharma & Chemicals SEG B Services SBU Chemicals SBU Pharma DIV Analgesics DIV Medical Substances Acetyl H-Insulin Mono Combo SEG C Corporate and Others Strategic Business Unit DIV Diabetical Products H-Insulin A-Insulin Division Product Line Paracetamol AS Insulin PCM EC-CS Consolidation Unit Palo Alto Insulin H-Insulin Product New York Insulin SAP AG 1999 If you use consolidation with integration to general ledger or profit center accounting, you generate the consolidation units and groups from the organizational units of the respective operating applications. The consolidation groups are defined by the profit centers and hierarchy nodes, the consolidation unit is built by the profit center and the company. (C) SAP AG AC665 1-15 Data Stream EIS BP Executive Business Information Planning System COCO-PA HR EC-CS Consolidation Dimension FI Data Consolidation Unit = Company / Business Area PCA Data CU = Company / Profit Center EC-PCA Profit Center Accounting Profit Center, Company Code FI-GL General Ledger SD MM Bal. Sheet Acct P&L Accounts and CO Object Assets Receivables Payables WIP Inventory Other. CO Controlling Cost Center Order Project SAP AG 1999 EC-CS consolidates on the basis of the organizational units company, business area, and profit center and is optimally integrated with these systems. If the transaction applications and the Consolidation system are all in the same client of the same system, data can be transferred to the Consolidation system online (in realtime). Additionally, data can be transferred by periodic extract or rollup from non-SAP systems. (C) SAP AG AC665 1-16 Performance Key Figures in the Model Group Enterprise Consolidated data Strategic Business Unit Division Chemicals Pharma Diabetical Product Line ... Analgesics Mono Combo CF Total Cash Flow ROCE Return on Capital Employed EBITDA Earnings before Interest ... and others: Sales, Profit ROA EBITDA Earnings before Interest ... CF Product AS Return on Operating Asset Transaction Cash Flow PCM and others: Sales, OPEX SAP AG 1999 For internal group reporting consolidation can be executed on different levels of the company. You can calculate key figures on different internal levels. They are used for internal/external evaluation of companies and for managing the company. For example, on product line level, you can define a profit center as an independent area of responsibility and analyze its profitability by key figures. Key figures can be used both as targets and as incentives. Consolidated data are particularly suitable for performance figures because of its aggregated data. (C) SAP AG AC665 1-17 Group Control: Procedures and Infrastructure Unit Summary You are now able to: List the reasons for using consolidation in your corporate group List the different types of consolidation List and distinguish between the organizational structures of the EC-CS component Use the sessions parameters to select the consolidation dimension SAP AG 1999 (C) SAP AG AC665 1-18 Exercise Data Data in Training System Data in IDES System ## = your course group number Organizational Elements Company Name C10000 IDES Palo Alto C20000 IDES New York C30000 IDES Chicago Company code Name C100 IDES Palo Alto C200 IDES New York C300 IDES Chicago Business area Name 4000 Chemicals 6000 Pharma 8000 Services 9900 Corporate/Other Functional areas 0100 Production 0110 Direct costs 0120 Overhead costs, production 0130 Credit, production 0300 Sales 0400 Administration 0500 Research & development 0980 Accrued costs (not in income statement) Controlling area C001 - for all course groups C001 - EC North America Chart of Accounts CAUS CAUS (C) SAP AG AC665 1-19 Group chart of accounts (C) SAP AG CONS AC665 1-20 CONS Account assignment elements G/L account Name Example: 1440## 40 + your group no. 14 144054 This example applies to all G/L accounts. Receivables, affiliated companies 1440## Gr. ## 144000 Receivables, affiliated companies Business area adjustment account 1449## Receivables, affiliated companies Business area adjustment account 144098 1640## Gr. ## 164000 Payables, affiliated companies Business area adjustment account 1649## Payables, affiliated companies Business area adjustment account 164098 Net sales, affiliated companies 8020## Gr. ## 802000 Consumption of raw materials 4000## Gr. ## 400000 Primary Cost Element Example: 4000## 40 + your group no. 14 Payables, affiliated companies 400054 This example applies to all primary cost elements. Consumption of raw materials 4000## Gr. ## 400000 Net sales, domestic 8020## Gr. ## 802000 Group chart of accounts CONS CONS EC-CS Cons. chart of accounts 01 US, ARE Balance Sheet, COGS 01 US, ARE Balance Sheet, COGS (C) SAP AG AC665 1-21 Name (C) SAP AG AC665 1-22 Group account Group chart of accounts is identical to item in consolidation chart 01 Example: 1301## 40 + your group no. 14 130154 This example applies to all group charts/items in consolidation chart of accounts 01. Group account Name Standard Hierarchy (C) SAP AG Receivables affiliated companies 1301## Receivables affiliated companies 130100 Receivables, affiliated companies Business area adjustment account 1301## Receivables, affiliated companies Business area adjustment account 130100 Payables, affiliated companies 2101## Payables, affiliated companies 210100 Payables, affiliated companies Business area adjustment account 2101## Payables, affiliated companies Business area adjustment account 210100 Net sales, affiliated companies 3012## Net sales, affiliated companies 301200 Consumption of raw materials 3101## Consumption of raw materials 310100 CUSA Standard hierarchy of controlling area C001 for all course groups CUSA Standard hierarchy of controlling area C001 AC665 1-23 Cost center Name C100C6111M Manufacturing Product Acetyl C100C6112M Manufacturing Product Paracetamol C100C6111A Administration Product AS C100C6112A Administration Product PCM C300C4311M Manufacturing Product Acetyl C300C4312M Manufacturing Product Paracetamol C300C4311A Administration Product Acetyl C300C4312A Administration Product Paracetamol Profit Center Standard Hierarchy C-Top-1 North America Profit Center Name C-Top-1 North America C-BA-6-BS B/S Business Unit PHARMA C6111 AS C6112 PCM C-BA-4-BS B/S Business Unit CHEMIE C4311 Acetyl C4312 Paracetamol C9902 Administration (C) SAP AG AC665 1-24 Dimension Name (C) SAP AG A2 through T2 Business area consolidation Gr## Example: A2: Gr01 B2: Gr02 J2: Gr10 02 Business area consolidation A3 through T3 Profit center consolidation Gr## 03 Profit center consolidation AC665 1-25 Worksheet for exercise data: Group_____ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ (C) SAP AG AC665 1-26 Konzernsteuerung: Verfahren und Infrastruktur Exercises Unit: Group Control: Procedures and Infrastructure Topic: Positioning At the conclusion of these exercises, you will be able to: Name the strategic business units in the IDES model group Describe the organizational units of consolidation Your enterprise comprises internal and external organizational structures. You should adapt these structures adequately to match SAP organizational units. 1-1 Name the strategic business units of the IDES model group. ______________________________________________________________ ______________________________________________________________ 1-2 Complete the sentences: 1-2.1 A dimension defines a particular ______________________ of group reporting for example, company consolidation, business area consolidation, or profit center consolidation. 1-2.2 The business object ___________________ is the smallest unit in group structuring on the basis of which complete consolidation can be carried out. 1-2.3 The business object consolidation group is an arbitrary grouping of several ________________________ for the purpose of consolidation and reporting. (C) SAP AG AC665 1-27 1-2.4 The consolidation units for the profit center consolidation area generated from _________________________ and _______________________. 1-2.5 Which additional consolidation groups are generated in profit center consolidation that are not generated in business area consolidation? (C) SAP AG AC665 1-28 Group Control-Solutions Unit: Group Control: Procedures and Infrastructure Topic: Positioning 1-1 Name the strategic business units of the IDES model group. Chemicals, Pharma, Services, Corporate and Others 1-2 Complete the sentences: 1-2.1 A dimension defines a specific characteristic of group reporting - for example, company consolidation, business area consolidation, or profit center consolidation. 1-2.2 The business object consolidation unit is the smallest unit in group structuring on the basis of which complete consolidation can be carried out. 1-2.3 The business object consolidation group is an arbitrary grouping of several consolidation units for the purpose of consolidation and reporting. 1-2.4 The consolidation units for the profit center consolidation area generated from profit centers and companies. 1-2.5 Which additional consolidation groups are generated in profit center consolidation as opposed to business area consolidation? Consolidation groups that correspond to the profit center hierarchy are generated. (C) SAP AG AC665 1-29 Integrated Data Transfer: FI Contents EC-CS: Data Structures FI: Terms and Assignments SAP AG 1999 (C) SAP AG AC665 2-1 Integrated Data Transfer: FI Unit Objectives At the conclusion of this unit, you will be able to: Describe EC-CS master data and its function Name the enterprise structures in the transaction system, and link these to the consolidation structures Name various data transfer methods and their functions Prepare data transfers for legal or management consolidation. SAP AG 1999 (C) SAP AG AC665 2-2 Course Overview Diagram EIS BP Executive Business Information Planning System EC-CS Consolidation Dimension FI Data PCA Data EC-PCA Profit Center Accounting FI-GL General Ledger SAP AG 1999 (C) SAP AG AC665 2-3 CO Controlling Integrated Data Transfer: FI Business Scenario The company puts you in charge of preparing external and internal consolidation types. Before you can transfer data from the sender system to the Consolidation system, you will have to analyze the various integration options, and acquire an overview of the various upstream components. Next, in the sender system, you will prepare the structures for transferring the data to the Consolidation system. When you do this, the enterprise structure of the upstream components will be linked with those of the Consolidation system, and the consolidation units and groups will be generated in the Consolidation system. You then decide how you will supply the consolidation types with values from the sender systems, and choose the appropriate data transfer method. SAP AG 1999 (C) SAP AG AC665 2-4 Integration of Master Data Sender System FI Companies Business Areas Profit Center Accounts Secondary Cost Consolidation System Dimension Version Ledger ECCS Organizational Units: - Consolidation Units - Consolidation Groups - Consolidation Hierarchy Consolidation Chart of Accounts, Financial Statement Items Elements Add. Account Assignments Subitems (Region, Functional Area, Cost Center...) SAP AG 1999 Consolidation is centered on grouping together data from individual elements of an organization to form a unified whole. The aim of consolidation is to show only the external relationships, and to eliminate internal connections and processes. Against this background, two types of master data are of primary importance: The organizational units themselves, together with their structure, and The financial statement items, whose structure determines the content of the data. The financial statement item is the basis of entries, postings, and reporting within consolidation. Its use is not merely confined to variables from financial statements, income statements, or appropriation of retained earnings that are relevant to financial accounting. Statistical information and key figures can also be managed using financial statement items. In the Consolidation system, their properties attributes are determined on the basis of the FS item type, where-applied indicator, FS item category, debit/credit sign, and breakdown category. Subitem: A subitem is an optional additional account assignment. For example, financial statement items for fixed assets may have to be additionally assigned with transaction types so that all changes in the financial statement items are shown from the opening to the closing balance. (C) SAP AG AC665 2-5 EC-CS: Data Structures SAP AG 1999 (C) SAP AG AC665 2-6 Organizational Structures Strategic Business Unit: Business Area Consolidation Unit Palo Alto / Pharma Chicago / Chemicals Chicago / Services ... Consolidation Group Palo Alto ... Chicago New York / Pharma ... New York Legal Business Unit: Company Group Dimension: Hierarchy of Companies and Business Areas SAP AG 1999 The company forms the basis for generating consolidation units. The business object consolidation unit is the smallest unit in group structuring on the basis of which complete consolidation can be carried out. The business object consolidation group is an arbitrary grouping of several consolidation units for the purpose of consolidation and reporting. The relationships between the business areas and the companies are represented in a hierarchy. (C) SAP AG AC665 2-7 Consolidation Dimension and Hierarchies CG Palo Alto / Pharma Chicago / Chemicals Chicago / Services ... ... CU New York / Pharma Chicago Palo Alto Dimension: Business Area Consolidation CU New York H1 Companies H2 Business Areas Hierarchy Pharma CG Palo Alto / Pharma Chemicals Services Corporate/Other New York / Pharma SAP AG 1999 CU: Consolidation Unit CG: Consolidation Group A dimension defines a specific characteristic of group reporting - for example, company consolidation, business area consolidation, or profit center consolidation. Organizational units and control data are defined according to the dimension. Consolidation charts of accounts and consolidation versions are defined for all dimensions. In reports, the data for various dimensions can be evaluated together. The consolidation units and groups are assigned hierarchically to a top consolidation group. A dimension comprises at least one hierarchy structure. A dimension can contain several hierarchies according to various statutory or internal requirements. For example, for a "business area consolidation" dimension: Reflect the business areas with reference to the legal companies Break down the group according to group areas. (C) SAP AG AC665 2-8 Business Area Consolidation Automatic Assignment of Business Areas Consolidation Unit Consolidation Unit Pharma Palo Alto / Pharma Group H2 Chemicals New York / Pharma Services Chicago / Services Transferred Assets Receivables Payables Balances P&L Corporate/ Other Company XY / Corporate / Other Bank Equity Taxes SAP AG 1999 All essential balance sheet items (such as transferred assets, receivables, payables, or stock on hand, as well as all the financial statement items in an income statement) can be assigned directly to the business area. The balance sheet items bank, equity, and taxes, on the other hand, cannot be assigned, or can only be indirectly assigned manually. The business transactions are transferred online or periodically to the consolidation units. The consolidation unit is derived on the basis of the combination of the legal entity company and the business area, or the consolidation business area. For the purposes of consolidation, particular business areas can be grouped together into consolidation business areas. (C) SAP AG AC665 2-9 Inventory valuations can differ depending on whether they are carried out from the point of view of local trade law, tax law, or the group. The valuation results from individual valuations of subsidiary ledgers are posted in summarized form to separate accounts in Financial Accounting. The various balance sheets and profit and loss statements are generated in individual financial statements by means of different assignments to the accounts in the financial statement structures. This enables you to maintain consolidated financial statements in parallel according to various statutory accounting requirements. In consolidation, the versions serve to maintain separate datasets in the consolidation database so that alternative consolidations can be managed. This means that various data categories (such as actual, plan, and budget data) can be maintained and consolidated. You can also carry out simulations, for example on the basis of different exchange rates or changes in the group structure. A consolidation version is composed of special versions. These are methods and tasks that cover the various areas of consolidation. This enables you to define various consolidation versions that differ only in one or a few areas, but otherwise refer to the same special version (that is, data is not redundant). (C) SAP AG AC665 2-10 Ledger and Currency ECMCT Totals Database $ Ledger US Ledger Cons. US Unit FS item TC ... Val. in LC Value Quantities in GC: USD FS item TC ... Val. in LC Value Quantities in GC: EURO Ledger EU Ledger Cons. EU Unit SAP AG 1999 The ledger is an area of the ECMCT totals table. It contains specifications for the data records that you work with during a terminal session. The data in the ECMCT totals table can be maintained in three currencies: Transaction currency Currency of the consolidation unit Ledger currency The ledger currency specifies the currency of the consolidation group. SAP delivers the standard ledger "1C" for consolidation. This ledger is not for use in a live customer system. Please create a new ledger (using ledger "1C" as a copy template). If you consolidate consolidation groups in different currencies, you also need additional ledgers, since each ledger is always maintained in one currency. If, for example, you want to consolidate one consolidation group in USD and another consolidation group in EURO, you require a ledger with the ledger currency USD, and another ledger with the ledger currency EURO. (C) SAP AG AC665 2-11 Consolidation Chart of Accounts FI Dimension Dimension Dimension Company Business Area Profit Center Consolidation Consolidation Consolidation Cons chart German GAAP, appr. in income statement G/L Account Transaction Chart of Accounts Secondary Cost Elements Cons chart German GAAP, appr. in balance sheet Chart: US GAAP Cons chart... CO External Charts of Accounts ECEC-CS SAP AG 1999 Consolidation is equipped with its own consolidation chart of accounts, which is not linked to the charts of accounts in FI. The consolidation items usually correspond to the group accounts, the financial statement items of a financial statement version, or to the transaction accounts (if these are unique). The consolidation chart of accounts can be generated from these structures automatically. The consolidation chart of accounts is a systematically structured directory of FS items that belong together. The grouping is based on external and/or internal requirements. For example, you can define one consolidation chart of accounts to accommodate the requirements of the particular legal reporting rules, and one to meet internal requirements. Within a consolidation dimension, you can use several consolidation charts of accounts to generate consolidated financial statements in parallel. Financial statement items are of central importance in data transfer, posting, and reporting. The system reads the breakdown category from the master data of the financial statement item, and determines the breakdown according to additional account assignments. If an item is broken down by subitems, the system determines the sender field of the transaction data structures on the basis of the subitem category. It then copies the value of the sender field to the subitem. If an item is broken down by partner, the system converts the code of the partner assignment in the transaction data to the partner unit. (C) SAP AG AC665 2-12 Chart and Breakdown Category 01 Consolidation Chart of Accounts Value Item Texts Cons C/A Totals Item Totals Item 01 Assets FS Item FS Item Type 1 Debit/Credit Sign + Where-Applied Indicator A FS Item Category ... Contra Item Consolidation Item ... Appropriation Item Specification Breakdown Category Subitem Partner Currency 1000 Year of Acquisition SAP AG 1999 The financial statement item is the basis of account assignment in the Consolidation system. It identifies a value or quantity specification according to cause, and can be differentiated by further additional account assignments. You can save short, medium, and long descriptive texts for each financial statement item. The FS item type gives a concrete specification of the attributes of a financial statement item with respect to entries, updates, and processing in evaluations. The following financial statement items types are available: value items, totals items, and text items. Where-applied indicator: The where-applied indicator is used to specify whether the financial statement item should belong to assets, liabilities and owner's equity, income statements, or statistical items. The FS item category can be freely defined by the user, for example to mark financial statement items as key figure items. The additional account assignments to be managed for each financial statement item are specified via the breakdown category. A fixed allocation of additional account assignments may be required (for example, the specification of the partner unit in receivable and payables items that is required to carry out an elimination of IU payables and receivables). In the above example, the breakdown category '1000' for asset transactions defines a transaction type as a necessary subassignment. (C) SAP AG AC665 2-13 Subitems Business area FI-GL account Transaction type FI Cost center Functional area Customer's country Accounting document G/L account FS Item The use of subitems depends on the FS item Subitem category Subitem Fixed asset Transaction type Divestiture Subitem Category ECEC-PCA Subitem FS item. ECEC-CS Net Sales Country Germany Expense Functional area Sales Consolidated sales revenue by customer regions (market) Consolidated income statement by cost of sales accounting SAP AG 1999 Subitems enable you to break down FS item values further. It may, for example, be necessary to additionally assign financial statement items in transferred assets with different transaction types so that all changes to the items are shown from the opening to the closing balance. The subitems are grouped into subitem categories, in order to distinguish the transaction types in transferred assets from those in equity, for example. Only one subitem category can be assigned to a particular financial statement item in EC-CS. In an integrated SAP environment, you can define a sender field (transaction type, for example, or customer country) for each subitem category. The Consolidation system has 6 flexible account assignments that can be supplied from the Accounting system: transaction type, functional area, business area, country of customer, cost center, and G/L account. Default subitems are provided for each of the subitem categories in the consolidation charts of accounts supplied with the system. With the help of custom characteristics, you can define your own additional subitem categories and subitems. In an integrated SAP environment, you can define a sender field (transaction type, for example, or customer country) for each subitem category. If the data is imported to EC-CS from FI or EC-PCA, the original account assignments are converted to subitems of the same name. In the transaction applications, specify that the appropriate fields are ready for input. (C) SAP AG AC665 2-14 Global Session Parameters ConsGroups FS Items Data Monitor ConsMonitor Infosystem Parameters Parameters ECCS Global Parameters Dimension Version Year Period 01 100 YYYY MMM Legal Actual data Cons C/A Ledger 01 US US Chart USD SAP AG 1999 The global parameters are used to save important EC-CS settings that typically remain constant during a system session. The settings to be saved are specified by the user. These settings can be changed at any time, and remain available after you log off and log on again. At startup, the information from the global parameters is either proposed as a default by functions, and sometimes cannot be changed on the screen in question. In presentations of consolidation results, as well as in Customizing, the global parameters are displayed in a status line at the top of the particular screen. In Customizing, a colored note indicates which parameter currently affects maintenance. Thus, maintaining financial statement items, for example, depends on the consolidation chart of accounts, but does not depend on the current version. (C) SAP AG AC665 2-15 Financial Accounting Data Structures Assignments SAP AG 1999 (C) SAP AG AC665 2-16 Preparation in FI EC-CS: Data Realtime update for consolidation types • Company • Business area FI Doc. Posting date Customizing Definition of active data streams: Dimension /Cons C/A / Version Version Master data consolidation units Ledger Definition of global organizational units Organizational units Company code Business area ... Accounts Add. acct assignments TTy Country Region ... Dimension Cons chart/accts Fiscal year/ Period Rules for ID combination (per consolidation type) Consolidation unit Assignment of charts of accounts to cons C/A FS item Assignment of accounts FS items Master data subitem category Subassignment Custom characteristics SAP AG 1999 The data source for EC-CS is the FI general ledger, and the company code is the organizational unit. The FI company code must be assigned to a chart of accounts and a company. In EC-CS, the consolidation units are generated from the business units (companies and/or business areas). In accounting transactions between business units in the enterprise, the relevant trading partner unit must be stored in the document. This is necessary for the subsequent interunit elimination. To transfer the data from the transaction sender system to the receiver system, you will make assignments tailored to the receiver system. These can be assignments that are equally binding for all consolidation types, such as the assignment of a company code to a company. If desired, business area balance sheets can be activated for each company code in FI. You can subdivide a company code into business areas to generate internal individual financial statements using freely selected areas of responsibility within a company. In business area consolidation, a consolidation business area must be assigned from the receiver system. If desired, you can create functional areas in FI so that the income statement can be grouped according to the requirements of cost of sales accounting. (C) SAP AG AC665 2-17 IMG Settings: Different Systems Preparation ECEC-CS Consolidation System • Companies • Consolidation Preparing Consolidation • Assign integrated cons types to the dimensions Transaction system Create or import global master data Business Area • Group Chart of Accounts • Consolidation Transaction Type Define combinations of company codes/business areas Transfer combinations of company codes/business areas Enter chart of accounts Assign operational accounts Prepare account assignments: • Consolidation transaction type • Consolidation business area • Trading partner company SAP AG 1999 If the consolidation and the transaction applications are in different systems or clients, the group structure must be known in the operational applications, so that the transaction data can be transferred to the consolidation system EC-CS. In the operational applications, the system reads the valid combinations of company codes, fiscal year variants and business areas and passes these on to consolidation, by download. Consequently in consolidation, the consolidation units and groups are automatically generated for the business area consolidation. The same applies for the structure of organizational units for profit center consolidation. (C) SAP AG AC665 2-18 FI: Organizational Elements Client Company C10000 C20000 C30000 --- Company Code C100 C200 C300 ... Business Area X 4000 X 6000 X X 8000 9900 X X X SAP AG 1999 The client is the highest logical level in the SAP system hierarchy. This is also the name of the corresponding logical system in which you work. The settings that you make at this level are available to all company codes. The company is the smallest organizational unit for which individual financial statements have to be created according to the trade regulations in question. A company can comprise one or more company codes. Each company code represents a unit that manages its financial statements independently. This is the level at which the legally required financial statements are created. The business area is an organizational unit of external accounting that corresponds to a limited business segment or area of responsibility in the enterprise to which changes in value entered in financial accounting can be assigned. Business areas primarily serve enterprise-external segment reporting, which extends beyond company codes to the significant business segments of the enterprise (product lines, for example). A segment is any business segment in the enterprise that can be isolated. The above example uses the following organizational units: Companies: Business Areas: C10000: IDES Palo Alto 4000: Chemicals C20000: IDES New York 6000: Pharma C30000: IDES Chicago 8000: Services 9900: Corporate and Others (C) SAP AG AC665 2-19 Assignment: Company Code - Company Client 001 ... NonNonSAP Systems FI Chart of Accounts CAUS Chart of Accounts ... Company Code C100 Company Code C200 Company Code ... Company C10000 Company C20000 Company ... Company ... EC EC-CS SAP AG 1999 Companies are the global organizational structures in FI. You can portray one or more of the client's company codes, as well as internal trading partners whose transaction financial accounting is carried out in other systems (SAP system or non-SAP systems). For the purpose of integrated data transfer, you have to assign the company codes of the transaction system to the companies of the group. The data to be consolidated can either be stored in the transaction system or distributed over various systems. It makes no difference if the systems involved are SAP R/3 Systems or non-SAP systems. The intercompany trading partners on other SAP systems as well as those on non-SAP systems must be represented by companies in FI. In EC-CS, consolidation units are generated automatically from these FI companies. This means that data from company codes to which a company has been assigned can be transferred to the appropriate integrated consolidation unit. In a similar way, integration techniques can be used to copy data from other SAP Systems to consolidation units. Otherwise, data entry is carried out using entry forms, flexible upload, or MS Access. (C) SAP AG AC665 2-20 Additional Account Assignment: Business Area MM Materials Plant Material Valuation Area Division SD Sales and Delivery Sales Organization PS Projects Project Cost center Distribution Channel FIFI-AA Fixed Assets Business Area Order Asset Investment Measure CO - Controlling SAP AG 1999 In many areas of the SAP System, master data is assigned to business areas. In most cases, this allows you to derive the business areas and the trading partner business areas automatically. In most business transactions, the business area is derived when the data is posted. If the additional account assignment is not unique, however, the business area is adjusted at the end of the period. Partner-specific information from the combination of company/business area forms the basis for integrated business area consolidation. The posting lines of the accounting business transactions are provided with a trading partner business area assignment, enabling revenue and expense elimination to be carried out in the Consolidation system. In the MM component, the relationships between purchase and sales orders are also tracked. (C) SAP AG AC665 2-21 Assignments: Asset Master Record FIFI-AA Asset 1 CO Time -dependent Data Time-dependent Business Area Cost Center 4000 C100C4311M Order Depreciation Areas Cost Center C100C4311M • • • C100 4000 C4311 Company Code Business Area 4000 Profit Center Order ########## • • • C100 4000 C4311 Company Code Business Area Profit Center Book depreciation ... Costing SAP AG 1999 Example of how the business area is derived: If business area balance sheets are activated in FI, the business area field in the master records for fixed assets automatically becomes a required entry field, regardless of the update control setting of the screen layout control for the asset class. The costs of procurement, goods manufactured, and the depreciation are posted to the business area. For cost accounting purposes, an asset can be assigned either to a cost center or to an order. Both CO objects are assigned to a company code, a business area, and a profit center when business area balance sheets or profit center accounting are activated. When procurement and manufacturing costs are posted to the fixed asset, the business area and the profit center are then derived from the cost center or the order. The periodic depreciations are also posted to the business area or the profit center. (C) SAP AG AC665 2-22 Trading Partner Information: FI G/L account for interunit business transactions Trading Partner in Master Record Customer Vendor G/L account Additional Account Assignment: Trading Partner in Document Business Area - Partner Business Area SAP AG 1999 Identifying the group-internal posting procedures between affiliated enterprises is an important way of preparing data in individual financial statements. SAP stores the "Sender-Receiver" relationship at the document level in Financial Accounting. The balances are handled in consolidation with the additional account assignment trading partner. The relevant trading partner number is stored in the customer/vendor master record. To allow entries in the "Trading partner" field, this field has to be set to "Optional entry" in the appropriate account group of the master data ("General data, control" field status group). When postings are made to this account, the company number is copied to the line item, and can be used in consolidation for elimination of IU payables and receivables, as well as in revenue and expense elimination. The trading partner can also be stored in the G/L account. During posting, it is then copied to the line item, enabling the elimination functions to be carried out in consolidation. Alternatively, the trading partner can also be set manually in the document. For business area consolidation, you also need a reference in FI to the trading partner business area with which you have a business relationship. The business area is usually derived from the MM/SD transactions. To allow the trading partner business areas to be entered for G/L account postings, as well as for transactions in FI-AP/-AR, the "Trading partner business area" field in the field status group of the FI reconciliation account must be set to optional entry. (C) SAP AG AC665 2-23 Preparation in FI: Document Type Document Type: Controls posting to line item 1 Customer / 1 Vendor Trading partner company can be assigned Not intercompany SAP AG 1999 The trading partner in each document must be uniform so that the partner assignment can be duplicated in the document when company internal transactions are posted. All the customers in a business transaction must, therefore, come from one company so that the sales revenue line is assigned a uniform trading partner. Consequently, you have to set the document type parameters to prevent intercompany postings. However, there are also business transactions in which it is desirable to assign more than one trading partner in postings. In this case, the trading partner for the document is no longer uniform, and the trading partner is, therefore, not duplicated to the offsetting entries. This particularly applies to postings that are not sales relevant, such as postings of automatic payments. Postings to cash accounts are generally not relevant to consolidation, and thus do not require a partner assignment. For these business transactions, you can set the document type to permit intercompany postings. "Enter trading partner" indicator : For G/L account postings (without direct reference to item account), document types that permit manual assignment to the trading partner may be required. Company internal transfer postings in P&L are an example of this type of posting. (C) SAP AG AC665 2-24 Company Code Assignment: Business Area Organizational Units: Local Global Company Code Business Area IDES Palo Alto Pharma Corporate IDES New York Pharma Corporate IDES Chicago Chemicals Services Corporate Default Consolidation Business Area XY ...... FI IDES Palo Alto Business Area Pharma Company Palo Alto ECEC-CS Consolidation Unit: XY/Palo Alto SAP AG 1999 While, in FI, the business areas are valid for all the company codes, during preparation for consolidation they are assigned to specific company codes. In realtime updates, the data stream for business area consolidation uses the document line item to determine the consolidation unit. Specify the combinations of company codes and business areas that can occur in postings in the transaction system. The system uses these to derive the combination of companies and consolidation groups. You can define an account assignment default for business area consolidation. If business area consolidation is not included in the document, the system accesses a default that you have defined. However, you can only store one default per company code. Alternative: You can check the assignment of business areas to company codes when the FI posting is made. You specify this in the data transfer settings for business area consolidation. (C) SAP AG AC665 2-25 Consolidation Business Area NonNonSAP ECEC-CS Consolidation Type: Business Area Consolidation Group Consolidation Business Area AB Company 100000/ Company Code 1000 FI Business Area AAAA Business Area BBBB ... Receiver System YYY: contains global characteristics SAP AG 1999 Sender System XXX: contains local and global characteristics The consolidation business areas are business areas that are used centrally in the group. These global characteristics are defined by the parent company. All systems that provide reports assign their local business area to the consolidation business areas. You must assign the business areas of the transaction system to the group's consolidation business areas. The assignment can be 1:1 or n:1. The consolidation units are formed using the combination of companies and consolidation business areas, which are the basis for business area consolidation. (C) SAP AG AC665 2-26 Preparation for Business Area Consolidation Activate business area balance sheets Maintain field status groups for G/L accounts G/L Account: Balance sheet for business area clearing Assign accounts for adjustments Maintain document type for business area adjustment Important for subsequent assignments of business area and partner business area using the balance sheet adjustment program Reconcile balances > Reconcile affiliates (see Execute Consolidation of Investments) Execute balance sheet adjustments SAP AG 1999 Check that the business area balance sheets are activated in the global definition of the company code. Depending on the objective of business area consolidation, when the business transactions are entered, it may be desirable to request that the assignments for the business area and the trading partner areas be as complete as possible. For the G/L accounts, specify whether the business areas should be entered as optional or required entries. In manual consolidation of business areas or partner business areas, you make this setting using the field status group in the G/L account. If no assignment is made for accounts for which you have set an optional entry, the transaction is assigned to business area "Space". On the closing key date, the business areas have to be broken down manually. At period end with the reconciliation of affiliated companies, check whether the payables/receivables are assigned to the corresponding partners. Breakdowns or adjustments according to business area sre carried out. If business area consolidation is also activated, distribution is carried out according to the partner business area. For the document that is to be posted, you have to store the corresponding accounts and a document type in FI. (C) SAP AG AC665 2-27 Business Area Adjustment FI: Incoming Invoice Account Business Area Vendor Expense 1 Expense 2 Partner BArea Debit Credit 1000 0001 0002 0003 0003 400 600 Business Area Adjustment Clear. Acct. BArea Partner BArea Debit Adjustment Credit 400 0001 0003 400 600 0002 0003 600 BArea: Business Area SAP AG 1999 If, when posting to an expense account, you also assign a cost center to an account (and this cost center is assigned to a business area), then the business area is also assigned automatically. If the business area in the revenue/expense line is uniform, it is automatically copied to the receivables/payables line. In our example, one document contains several expense accounts that were posted in various business areas. The breakdown of the business areas is, therefore, not uniform. Consequently, the business areas are not copied to the automatically generated line items (payables, receivables, tax). This assignment is made when the financial statement is adjusted and posted to special adjustment accounts. In an FI document, an open item cannot have a partner business area. When there are transactions between affiliated enterprises, the business area is set during adjustment. During adjustment a new document is generated with a partner business area in the receivables/payables line. A business area clearing account is used for this purpose. The partner business area normally has to be set manually for realtime updates in FI. (C) SAP AG AC665 2-28 In EC-CS, transaction types show the changes made to financial statement items. In FI/FI-AA, the transaction type classifies the business transaction (acquisition, retirement, transfer to equity account/transferred assets, for example). Transaction types are the basis for assigning a business transaction to a column of the equity/assets list. The consolidation transaction types provided in the standard SAP system are already assigned to the asset transaction types in a way that allows a group asset history sheet to be generated. If you have defined your own asset transaction types/consolidation transaction types, or changed those provided in the system, assign the transaction types to the corresponding consolidation transaction types, or correct the assignments accordingly. The consolidation transaction type can be defined as a required entry field via the field status group of the G/L account. You can define validations that can be used to ensure that only transaction types belonging to a special group can be assigned to particular accounts. To do this, you define corresponding validation rules at the document line item level. (C) SAP AG AC665 2-29 The functional area is required to generate a profit and loss statement in Financial Accounting using the cost of sales accounting procedure. The company expenses that cannot be directly allocated to sales are distributed to functional areas. In cost of sales accounting, the functional groups administration, sales, marketing, production, or research and development are used to show what has caused costs to be incurred in the enterprise, thus reflecting the economic purpose of the expenses. Substitution is used to copy the functional area to the documents of financial and cost accounting. If necessary, a change of functional area in the form of debit and credit can be taken into consideration in allocations of overhead costs. In P&L, the functional area that is displayed is the one following CO allocation, and not that of the original account allocation. The reconciliation ledger contains the information required to make postings to the relevant accounts in Financial Accounting. Substitution rule: In the SAP standard system, the following trigger points are defined for the FI component: 0005 (cost of sales accounting). If a particular cost center type is posted to a cost center in FI, an additional account assignment is generated to the appropriate functional area. (C) SAP AG AC665 2-30 For FI reconciliation postings in CO allocations between company codes / business areas, clearing accounts are defined and assigned to the business transactions (transfer postings, allocations, assessments, and so on) or to object classes. The clearing accounts have either already been assigned in CO Customizing, or they will have to be assigned now. You can create a separate document type for posting from the reconciliation ledger. (C) SAP AG AC665 2-31 Preparations: Materials Management Identify companies in the same client Assign division/valuation area to business area Maintain field selection group for division Specify FI account for price differences Maintain CO account assignment for price differences SAP AG 1999 Select the companies that are maintained in the same client of your system, and which use the MM (Materials Master) and SD (Sales and Distribution) modules. The "Read Purchase Orders/Sales Orders" indicator is used to determine the partner business area and partner profit center in Logistics applications. The partner business area and partner profit center are derived from the purchase order or the sales order. When business area consolidation is used, the combinations of division and valuation area are assigned to a business area. The assigned business area is copied to this division in all material stock postings. To ensure that the assignment to a business area is carried out for all items, products, and services, the "division" field should be set as a required entry when the material masters are maintained. In the SAP standard system, the default setting for the "division" field in the field selection group is 090. However, a number of other fields are assigned to this group. To ensure that the required entry does not apply to all the fields in the group, it is useful to define a separate field selection group for the division field. Goods movements can result in price differences. In FI, specify the FI accounts which should be posted in the event of price differences. These can be created as a cost element or defined as not relevant to CO. If price differences are defined as a cost element, then you should assign a CO account assignment object for this business area to each price difference account of this business area. (C) SAP AG AC665 2-32 Preparations: Sales Identify companies in the same client Assign rules to each sales area Assign business area to each plant and division Assign business area to each sales area SAP AG 1999 Select the companies that are maintained in the same client of your system, and which use the MM (Materials Master) and SD (Sales and Distribution) modules. The "Read Purchase Orders/Sales Orders" indicator is used to determine the partner business area and partner profit center in Logistics applications. The partner business area and partner profit center are derived from the purchase order or the sales order. For business area assignment, you have to specify for each sales area the rules that the R/3 System should use to find a business area. Otherwise, account assignment for each business area cannot be carried out. In the standard system there are two default rules for automatically assigning business areas in revenue account determination: Business area assignment per plant and division Business area assignment per sales area For each sales area, specify the respective rule for business area determination. (C) SAP AG AC665 2-33 Integrated Data Transfer: FI Unit Summary You are now able to: Describe EC-CS master data and its function Name the enterprise structures in the transaction system, and link these to the consolidation structures Name various data transfer methods and their functions Prepare data transfers for legal or management consolidation. SAP AG 1999 (C) SAP AG AC665 2-34 Integrated Data Transfer-Exercises Unit: Integrated Data Transfer: FI Topic: EC-CS: Data Structures At the conclusion of these exercises, you will be able to: Create consolidation dimensions Copy consolidation charts of accounts Define session parameters In the following exercise, you will prepare data in FI for transfer to Consolidation. 1-1 Check your course group's organizational units in the operational applications FI and ECPCA. Company Company code Business area Functional area Controlling area Profit Center You will find your course group's organizational units in the Exercise Data page. 1-2 Use the Copy dimensions function to create a dimension for business area consolidation. Call your dimension #2 (where # corresponds to the letter of your course group). Use the instructor's dimension Z2 as a copy template. Please copy only consolidation functions, methods, and measures. (C) SAP AG AC665 2-35 The system requests you to create a "to dimension". Confirm this request. 1-3 Use the Copy dimensions function to create a dimension for profit center consolidation. Call your dimension A3 (the letters A to T correspond to the number of your course group). Use the instructor's dimension Z3 as a copy template. Please copy only consolidation functions, methods, and measures. The system requests you to create a "to dimension". Confirm this request. 1-4 Specify your group-specific session parameters for business area consolidation. Dimension: A2 (or J2 for course group 10, T2 for course group 20) Version: 100 Fiscal year: current year Period 012 Cons. chart of accounts 01 Ledger: US 1-5 Create the new item 3012## Sales Revenue from Affiliates. Copy from item 301200 to item 3012##. As the item number, enter 3012## (where ## = 40 + your group number). Description: Sales Revenue from Affiliates Choose the function Breakdown category. Here you can change the Specification of the Subitem and activate the Specification Partner. 1-6 You should now know where the functional areas are defined. Check if the subitem category Functional Areas as been defined in EC-CS with the respective subitems. 1-7 Additional Exercise Theoretical Question: Imagine that European countries have united to form a new country called “EU”. Which areas of consolidation might be affected from the new entry in the global table of countries? _____________________________________________________________ (C) SAP AG AC665 2-36 1-8 Additional Exercise Create a subitem category called “Customer Country Gr. ##”. Use the subitem category A to T according to your group. Example: Group 01 creates category ‘A’, group 02 creates ‘B’, and so forth. Field length: 02 Sender field for subitem: 04 (country of customer) Choose Copy subitems. Save the subitem category . Leave Test Run selected and look at the generated list. (C) SAP AG AC665 2-37 Unit: Integrated Data Transfer: FI Topic: Financial Accounting At the conclusion of these exercises, you will be able to: Describe the settings and assignments that have to be made in the transaction sender systems Post and analyze FI documents with additional account assignments that are relevant to consolidation 2-1 Which transaction chart of accounts is assigned to the company codes C100, C200, and C300? Check whether the business area financial statements (balance sheets) are activated in the company codes. 2-1.1 Check whether the transaction chart of accounts for the company codes is assigned to the group chart of accounts CONS. 2-1.2 Check the consolidation business areas and the combination business area consolidation business area. 2-2 In the consolidation system, how can you ensure that only the transaction business areas are posted in a given company code? 2-3 For your postings later on, create a group account called “Net sales, affiliated companies”. You enter: Account no.: Chart of accounts: Text: P&L account type: Account group: Select P & L account. Save your data. (C) SAP AG AC665 2-38 3012## (## = your course group number + 40) CONS NS affiliated Gr## X profit & loss accounts 2-4 For your postings later on, create the G/L account "Net sales, affiliated companies" in company code C300, and assign the G/L account to the group account. (## = your course group number + 40) Input data on tab Type/Description: Account no.: 8020## Company code: C300 Text: NS affiliated Gr## Account group: profit & loss accounts Select P & L account. Group account: 3012## (## = your course group number + 40) Input data on tab Control Data: Account currency: USD Tax category: + (only output tax) After you choose Enter, the following fields can be entered: Line item display: Sort key: 001 (Posting data) Input data on tab Entry/Bank/Interest: Field status group: G029 (Sales revenue accounts). Save your entries. 2-5 For your postings later on, create a primary cost element called “Net sales - affiliated companies”. To do this, run the FI transaction Create/change G/L accounts and select Edit Cost Element. Input data: Controlling Area C001 Number: 8020## Valid from: 01/01 of the current year Cost element category: 11 (Revenues) Save your data. 2-6 Check the consolidation transaction type that the FI-AA transaction type 100 ("Addition") is assigned to. Where do you find the consolidation transaction type in the task level menu? (C) SAP AG AC665 2-39 2-7 Additional Exercise: Create an asset master record in company code C100. Class 11000 Description Bottling plant Business area 6000 Cost center: C100C6111M Manufact. AS (Palo Alto) Depreciation key: LINR Useful life: 10 years Save your data. Please enter the number of the asset master record in the "Exercise Data" worksheet. 2-8 IDES Chicago has started supply relationships with IDES Palo Alto. In IDES Chicago, create a customer master record for the customer IDES Palo Alto. Which trading partner do you have to store in the customer master record? What you enter: Account group: Customer: Company code: Name: Search term: Postal code: City: Country: Language: Reconciliation account: Terms of payment: (C) SAP AG AC665 2-40 Customers (external number assignment) PA## C300 Palo Alto Group ## Palo Alto ## 12345 Palo Alto US EN 1440## Receivables - affiliated companies Gr. ## 0001 2.9 IDES Palo Alto orders goods from IDES Chicago. In IDES Palo Alto, create a vendor master record for the vendor IDES Chicago. Which trading partner do you have to store in the vendor master record? What you enter: Vendor: Company code: Account group: Name: Postal code: City: Country: Language: Reconciliation account: Terms of payment: 2-10 CH## C100 LIEF Ch## 45600 Chicago US EN 1640## Payables - affiliated companies Gr. ## 0001 Check the status of the "Trading partner business area" field in the company code segment of the following reconciliation accounts: 1440## "Receivables from affiliated companies Gr. ##", and 1640## "Payables - affiliated companies Gr. ##" (## = your group number + 40) 2-11 See if the cost of sales method is activated for company code C100. 2-11.1 Examine the substitution rule that is needed in the FI document for the assignment of functional areas. 2-11.2 Additional Exercise: What does the cost center category 'M' stand for? 2-12 Additional Exercise: When you store FI document type, what restrictions are required to ensure that the account assignment of the trading partner can be stored uniquely in the posting document? (C) SAP AG AC665 2-41 Integrated Data Transfer-Solutions Unit: Integrated Data Transfer: FI Topic: EC-CS: Data Structures 1-1 Check your course group's organizational units in the operational applications FI and ECPCA. Company Company code Business area Functional area Controlling area Profit Center You will find your course group's organizational units in the Exercise Data page. SAP Menu Tools Accelerated SAP SAP Reference IMG Edit Project SAP Reference IMG Enterprise Structure Definition Financial Accounting Maintain Company SAP Menu Tools Accelerated SAP SAP Reference IMG Edit Project SAP Reference IMG Enterprise Structure Definition Financial Accounting Define, copy, delete, check company code SAP Menu Tools Accelerated SAP SAP Reference IMG Edit Project SAP Reference IMG Enterprise Structure Definition Financial Accounting Define Business Area SAP Reference IMG Enterprise Structure Structure Maintenance Definition Financial Accounting Define Functional Area SAP Reference IMG Enterprise Structure Definition Controlling Maintain Controlling Area SAP Menu Accounting Enterprise Controlling Profit Center Accounting Master Data Profit Center Maintain Profit Center (C) SAP AG AC665 2-42 1-2 Use the Copy Dimensions function to create a dimension for business area consolidation. Call your dimension A2 (the letters A to T correspond to the number of your course group). Use the instructor's dimension Z2 as a copy template. Please copy only consolidation functions, methods, and measures. The system requests you to create a "to dimension". Confirm this request. SAP Reference IMG Enterprise Controlling Consolidation Preparing for Production Copy dimensions 1-3 Use the Copy dimensions function to create a dimension for profit center consolidation. Call your dimension A3 (the letters A to T correspond to the number of your course group). Use the instructor's dimension Z3 as a copy template. Please copy only consolidation functions, methods, and measures. The system requests you to create a "to dimension". Confirm this request. SAP Reference IMG Enterprise Controlling Consolidation Preparing for Production Copy dimensions 1-4 Specify your group-specific session parameters for business area consolidation. Dimension: A2 (or J2 for course group 10, T2 for course group 20) Version: 100 Fiscal year: current year period: current period Cons chart of accounts: 01 Ledger: US SAP Reference IMG Enterprise Controlling Consolidation Specify Global Parameters (C) SAP AG AC665 2-43 1-5 Create the new item Sales Revenue from Affiliates. Copy from item 301200 to item 3012##. As the item number, enter 3012## (where ## = 40 + your group number). Description: Sales Revenue from Affiliates Choose the function Breakdown category. Here you can change the Specification of the Subitem and activate the Specification Partner. SAP Reference IMG Enterprise Controlling Consolidation Master Data FS Items User-defined chart of accounts Edit single items Change item Enter item 301200 and choose FS items copy. Copy this item to the item for your group. 1-6 You should now know where the functional areas are defined. Check if the subitem category Functional Areas as been defined in EC-CS with the respective subitems. SAP Reference IMG Enterprise Controlling Consolidation Master Data FS Items Subassignments Define subitems Display subitems 1-7 Additional Exercise Theoretical Question: Imagine that European countries have united to form a new country called “EU”. Which areas of consolidation might be affected from the new entry in the global table of countries? The table of countries must contain an entry for “EU”: SAP Reference IMG Global Settings Set up Countries Define Countries The subitem category “Regions” must contain a new subitem for “EU”: SAP Reference IMG Enterprise Controlling Consolidation Master Data Item Assignment Information Define Subitems Create Subitem Subitem category ‘Region’: 04 (C) SAP AG AC665 2-44 1-8 Additional Exercise Create a subitem category called “Customer Country Gr. ##”. Use the subitem category A to T according to your group. Example: Group 01 creates category ‘A’, group 02 creates ‘B’, and so forth. Field length: 02 Sender field for subitem: 04 (country of customer) Choose Copy subitems. Save the subitem category . Deactivate Test Run selected and look at the generated list. SAP Reference IMG Enterprise Controlling Consolidation Master Data FS Items Assignment Information Define Subitem Categories (C) SAP AG AC665 2-45 Unit: Integrated Data Transfer: FI Topic: Financial Accounting 2-1 Which transaction chart of accounts is assigned to the company codes C100, C200, and C300? Check whether the business area financial statements (balance sheets) are activated in the company codes. SAP Reference IMG Financial Accounting Financial Accounting Global Settings Company Code Check and Extend Global Parameters 2-1.1 Check whether the transaction chart of accounts for the company codes is assigned to the group chart of accounts CONS. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the sender system Preparations Related to all Consolidation Types Transaction Accounts: Assignment of Group Accounts Assign group chart of accts to (transaction) accts 2-1.2 Check the consolidation business areas and the combination business area consolidation business area. SAP Reference IMG Enterprise Structure Definition Financial Accounting Maintain Consolidation Business Area SAP Reference IMG Enterprise Structure Allocation Financial Accounting Allocate Business Area – Consolidation Business Area (C) SAP AG AC665 2-46 2-2 In the consolidation system, how can you ensure that only the transaction business areas are posted in a given company code? SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the Sender System Enterprise Structure Checking the Structure for Business Area Consolidation Combination of company codes/business areas 2-3 For your postings later on, create a group account called “Net sales, affiliated companies”. You enter: Account no.: Chart of accounts: Text: P&L account type: Account group: 3012## (## = your course group number + 40) CONS NS affiliated Gr## X profit & loss accounts Select P & L account. Save your data. SAP Menu Accounting Financial accounting General ledger Master records Single editing Chart of accounts (C) SAP AG AC665 2-47 2-4 For your postings later on, create the G/L account "Net sales, affiliated companies" in company code C300, and assign the G/L account to the group account. (## = your course group number + 40) SAP Menu Accounting Financial accounting General ledger Master records Single editing Central Input data on tab Type/Description: Account no.: 8020## Company code: C300 Text: NS affiliated Gr## Account group: profit & loss accounts Select P & L account. Group account: 3012## (## = your course group number + 40) Input data on tab Control Data: Account currency: USD Tax category: + (only output tax) After you choose Enter, the following fields can be entered: Line item display: Sort key: 001 (Posting data) Input data on tab Entry/Bank/Interest: Field status group: Save your entries. (C) SAP AG AC665 2-48 G029 (Sales revenue accounts). 2-5 For your postings later on, create a primary cost element called “Net sales - affiliated companies”. Input data: Controlling Area C001 Number: 8020## Valid from: 01/01 of the current year Cost element category: 11 (Revenues) Save your data. Accounting Controlling Cost elements Master data Cost element Individual processing Create primary 2-6 Check the consolidation transaction type that the FI-AA transaction type 100 ("Addition") is assigned to. Where do you find the consolidation transaction type in the task level menu? SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the Sender System Preparations Related to All Consolidation Types Assignment of Transaction Types Assign asset transaction types / Maintain transaction types for Consolidation 2-7 Additional Exercise: Create an asset master record in company code C100. Class: 11000 SAP Menu Accounting Financial Accounting Fixed Assets Asset Create Asset Input Data: Tab General: Description: Bottling plant Tab Time-dependent: Business area: 6000 Cost center: C1006111M Manufact. Product Acetyl Tab Valuation: Depreciation key: Useful life: LINR 10 years Save your data. Please enter the number of the asset master record in the "Exercise Data" worksheet. (C) SAP AG AC665 2-49 2-8 IDES Chicago has started supply relationships with IDES Palo Alto. In IDES Chicago, create a customer master record for the customer IDES Palo Alto. Which trading partner do you have to store in the customer master record? SAP Menu Accounting Financial Accounting Accounts receivable Master records Create What you enter: Account group: Customer: Company code: Customers (external number assignment) PA## (## = your group number + 40) C300 Tab Address: Name: Palo Alto Group ## Search term: Palo Alto ## Postal code: 12345 City: Palo Alto Country: US Language: EN Tab Control Data: Reconciliation account: 1440## Receivables - affiliated companies Gr. ## Tab Terms of Payment: Terms of payment: 0001 Store trading partner C10000 in tab Control Data. (C) SAP AG AC665 2-50 2-9 IDES Palo Alto orders goods from IDES Chicago. In IDES Palo Alto, create a vendor master record for the vendor IDES Chicago. Which trading partner do you have to store in the vendor master record? SAP Menu Accounting Financial Accounting Accounts payable Master records Display What you enter: Vendor: CH## (## = your group number + 40) Company code: C100 Account group: LIEF Name: Chicago group ## Search term: Ch## Postal code: 45600 City: Chicago Country: US Language: EN Reconciliation account: 1640## Payables - affiliated companies Gr. ## Terms of payment: 0001 Store trading partner C30000. 2-10 Check the status of the "Trading partner business area" field in the company code segment of the following reconciliation accounts: 1440## "Receivables from affiliated companies Gr. ##", and 1640## "Payables - affiliated companies Gr. ##" (## = your group number + 40) SAP Menu Accounting Financial Accounting General ledger Single Editing Central Choose Display. Choose the tab Entry/Bank/Interest. Doubleclick the Field Status Group. Select the Additional account assignments group. (C) SAP AG AC665 2-51 2-11 See if the cost of sales method is activated for company code C100. Activating the cost of sales method: SAP Reference IMG Financial Accounting Financial Accounting Global Settings Company Code Cost of sales method Activate cost of sales method 2-11.1 Examine the substitution rule that is needed in the FI document for the assignment of functional areas. SAP Reference IMG Financial Accounting Financial Accounting Global Settings Company Code Cost of Sales Method Set up Substitution for Cost of sales Method Define Substitution Select the substitution FA-EC "Functional area derived from cost center category". Choose Production Costs. 2-11.2 Additional Exercise: What does the cost center category 'M' stand for? SAP Reference IMG Controlling Cost Center Accounting Master Data Cost Centers Maintain Cost Center Categories The cost center category stands for Material. 2-12 Additional Exercise: When you store FI document type, what restrictions are required to ensure that the account assignment of the trading partner can be stored uniquely in the posting document? SAP Reference IMG Financial Accounting Financial Accounting Global Settings Document Document Header Overview (Document Types) Select the document type DR and choose Details: In the "Control data" box, the Customer/vendor check option must be flagged. The "Intercompany postings" option must be deselected. (C) SAP AG AC665 2-52 Data Transfer Methods: FI Data Contents Data Transfer Methods Assignments in EC-CS SAP AG 1999 (C) SAP AG AC665 3-1 Data Transfer Methods: FI Data Unit Objectives At the conclusion of this unit, you will be able to: Describe the various data transfer methods and how to use them Make preparations in the sender and receiver systems for transferring data for the purposes of legal and management consolidation SAP AG 1999 (C) SAP AG AC665 3-2 Course Overview Diagram EIS BP Executive Business Information Planning System EC-CS Consolidation Dimension FI Data PCA Data EC-PCA Profit Center Accounting FI-GL General Ledger SAP AG 1999 (C) SAP AG AC665 3-3 CO Controlling Data Transfer Methods: FI Data Business Scenario Your company has assigned you the task of making preparations for legal and management consolidations. You specify which data the sender systems supply to which consolidation types. You also specify which data transfer method you are going to use. SAP AG 1999 (C) SAP AG AC665 3-4 Consolidation With Different Releases EC-CS 4.X R/3 System 3.X FI, CO, PCA R/3 System 4.X Non-SAP system FI, CO, PCA, EC-CS Transfer using: ALE, Rollup, Extract, Flexible Upload, MS Access SAP AG 1999 The EC-CS component provides powerful functionality in both homogenous and heterogeneous system environments. The component copes easily with non-standardized key systems (organizational units, charts of accounts, products, and so on), financial applications, and hardware environments. The group companies who do not use SAP Consolidation for financial accounting are mapped as companies in FI. This also applies to companies that run their transaction bookkeeping on a non-SAP system. In EC-CS, consolidation units are generated automatically from these FI companies. This means that data from company codes to which a company has been assigned can be transferred to the appropriate integrated consolidation unit. If the transaction applications and the Consolidation system are all in the same client of the same system, data can be transferred to the Consolidation system online (in realtime). It is also possible to transfer data from SAP systems by means of periodic extracts and rollups. Data from non-SAP systems can be imported using special data entry forms, flexible uploads, and Microsoft Access. (C) SAP AG AC665 3-5 Data Transfer Methods Central Scenario Realtime Update Company Consolidation Business Area Consolidation Profit Center Consolidation SAP AG 1999 (C) SAP AG AC665 3-6 Periodic Extract Decentralized Scenario Rollup Realtime Update Periodic Extract Rollup Prepare Data Transfer ECEC-CS Consolidation System Transaction System Create or import global master data Preparing Consolidation Set up cons unit/group Prepare transfer of data: - Assign C/A to cons charts of accts - Define data streams - etc. For Rollup: Transfer settings to the sender system Define combinations of company codes/business areas Transfer combinations of company codes/ business areas Enter charts of accounts For Rollup: Transfer settings from consolidation system Activate data transfers SAP AG 1999 For the purposes of transferring transaction data to the EC-CS consolidation system, certain Customizing settings for consolidation have to be known in the transaction applications in order to convert the data to the required account assignment. If the consolidation and the transaction applications are in different systems or clients, it is necessary to transfer the Customizing settings from the consolidation system to the transaction system by means of download and upload. This applies to Customizing settings regarding - consolidation charts of accounts - financial statement items - breakdown categories - subitem categories - subitems - assignment of dimensions/integrated consolidation types - rules for ID combination - global settings (for example, Alpha conversion) When a rollup of the transaction data is generated in the transaction system, the system uses the Customizing settings to convert the data. The file generated by the rollup can then be checked and written to the consolidation system. (C) SAP AG AC665 3-7 Specify the group to which the companies of this SAP System report. Then define the fiscal year variant used in Consolidation. Also specify the Consolidation system, the consolidation types that are active for integration, and the data transfer methods to be used for each of these consolidation types. You will need to make these settings in every client of every system. The system reads the consolidation chart of accounts and the corresponding transaction charts of accounts for every data stream. On the basis of this information, it determines the appropriate item in the consolidation chart of accounts for each transaction account. The system checks the following before the settings can be saved: Whether active data streams exist (at least one data stream must be defined and flagged as active for each data transfer method) The assignment of group accounts to G/L accounts (does not apply to periodic extract method) Whether a default subitem and sender field have been defined in the master record of the subitem categories used. Business area consolidation: If some company codes post to different business areas, you can specify here that a check should be run in the Accounting system to see if a business area defined in the document is valid for the company code in question. When the system runs this check, it uses the permissible combinations of company code and business area that you defined in Customizing. (C) SAP AG AC665 3-8 The data transfer method controls how values from the transaction accounts are transferred to the items in the consolidation chart of accounts. If you use the realtime update method, every accounting transaction that affects the general ledger is updated at the same time in FI and in the totals records of the consolidation ledger. When data is transferred, the system determines how each data record should be updated in the Consolidation system. It does this by looking at the definition and configuration of the data streams. A document is only written to a ledger if the ledger is assigned to all the consolidation units involved and all have the same fiscal year variant. When defining the ledger you can specify whether you want to keep journal entry records in the journal entry table in addition to totals records. (C) SAP AG AC665 3-9 In the standard SAP System, a rollup is a tool for transferring data records from a sender table to a receiver table. Generally speaking, the sender and receiver tables are structured differently. This means that rules specifying how the individual fields are to be transferred have to be defined. The standard system already contains rules for transferring data to EC-CS. This means that a rollup is a user-friendly option for transferring data, particularly from Profit Center Accounting. (C) SAP AG AC665 3-10 Transferring Values from Transaction G/L Accounts Cons Chart CO Balance Sheets Cost Elements ECEC-CS "Group" FI "Country- Chart of "Transaction" Chart of Specific" Accounts Chart of Accounts 1:1 Income Stmt Accounts 1 N: Realtime Update Cash Flow Stmt Rollup 1 1: Statistical Factors (Statutory) Key Figures Post Financial Statement Consolidated Statements Transaction Sender Systems SAP AG 1999 The data transfer method controls how values from the transaction accounts are transferred to the items in the consolidation chart of accounts. To generate the group chart of accounts manually, you enter the group chart of accounts in the chart of accounts list in the receiver system and asssign the account groups to the group chart of accounts. In FI, you define the chart of accounts segment for the G/L accounts in the group chart of accounts. The consolidation chart of accounts provides a common structure to unify the potentially diverse charts of accounts of the internal trading partners. Therefore, the accounts in the group chart of accounts must be identical to the financial statement items in the consolidation chart of accounts. To transfer the data, you assign the group chart of accounts to the consolidation chart of accounts in the receiver system. Preparations in the sender system include assigning the group chart of accounts to a transaction chart of accounts. You enter the group account number in the chart of accounts segment defined for the transaction G/L account. The G/L accounts can be grouped together using the group account number defined in the G/L account. You cannot assign a group account to a secondary cost element because it is not an FI account. If the transaction chart of accounts contains secondary cost elements, you can assign groups of cost elements to individual line items. (C) SAP AG AC665 3-11 Creating a Group Chart of Accounts/Items either or Cons Chart of Accts Create group chart of accounts manually Balance Sheet ECEC-CS Generate from consolidation chart of accounts Income Statement Generate items from chart of accounts Cash Flow Statement Statistical Factors Key Figures SAP AG 1999 You can use programs to generate consolidation charts of accounts from the charts of accounts. You can also transfer (1:1) secondary cost elements as financial statement items. If you wish to bundle cost elements, assign the cost element range to the financial statement items in the consolidated chart of accounts. You can check the assignment of accounts and financial statement figures by using reports for analysis and reconciliation. You can generate the group chart of accounts from a consolidation chart of accounts. It is not necessary to create either the chart of accounts or the account group in advance. The system creates these automatically. To transfer the data, assign the group chart of accounts in the sender system to the consolidation chart of accounts in the EC-CS receiver system. When doing this, you can determine whether you wish to assign ranges of the secondary cost elements to financial statement items. (C) SAP AG AC665 3-12 FI Accounts / Secondary Cost Elements FI CO Primary Cost Elements Secondary Cost Elements EC-CS Cons Chart of Accts Balance Sheet Group together: Assessment Activity Allocation Order Settlement Income Statement Material cost element Order settlement Cash Flow Statement Internal activity allocation Statistical Factors Key Figures SAP AG 1999 You can generate items in the consolidation chart of accounts automatically for secondary cost elements. In this case, you must specify the controlling area and date to which the secondary cost elements apply. Generally speaking, you will not want to generate a separate item in the consolidation chart of accounts for each individual secondary cost element. Instead, you will group together secondary cost elements, and assign this group of elements to a consolidation item. You can group the cost elements together by cost element category, and assign each grouping to an item in the consolidation chart of accounts. The items in the consolidation chart of accounts must be defined first, though. If a consolidation chart of accounts has already been defined, you can decide whether you merely want to add new items, or whether you want to overwrite existing items. When you assign secondary cost element groupings to items in the consolidation chart of accounts, you specify that cost element groupings should be taken into account when data is transferred. You cannot assign a group account to a secondary cost element because it is not an FI account. (C) SAP AG AC665 3-13 Periodic Extract Transaction System FI Doc. General Ledger GLT0 Transaction Figures Parallel Posting Cons Staging GLT3 Ledger 09 Extract: RFBILA00 + Transfer of the File Consolidation system Update in EC-CS ECMCT Cons Proc. Ledger Cons Staging Ledger 09 GLT3 Ledger Currency Data SAP AG 1999 The data transfer method controls how values from the transaction accounts are transferred to the items in the consolidation chart of accounts. The accounting transactions that affect the general ledger are updated in the transaction figures table and in the totals records of the consolidation staging ledger (09) at the same time in the sender system. Data is selected from the consolidation staging ladger at regular intervals. Data is forwarded using a file. The EC-CS component contains a program for uploading, converting and updating the extract. Ideally, the ledger currency of ledger 09 should be the same in the sender and receiver systems. The sender system only sends consolidation values to the receiver system, not ledger currency details. For different currencies you have to carry out the currency translation task in the data monitor. (C) SAP AG AC665 3-14 Transaction Accounts - Periodic Extract Cons Chart of Accts CO Balance Sheet Cost Elements ECEC-CS FI Income Statement "Transaction" Chart of Accounts 1 1: N:1 Group Financial Stateme nt Version Cash Flow Statement 1:1 Statistical Factors Data Extract Financial Statement Post Financial Statement Key Figures Consolidated Financial Statements Transaction Sender Systems SAP AG 1999 If you use the periodic extract method for transferring data, there must be a financial statement version in the sender system, and the items in this version must correspond to the items in the consolidation chart of accounts. You can create the item hierarchies of a consolidation chart of accounts from an existing financial statement version. In this case, you must first define the consolidation chart of accounts for which you want to generate the item hierarchies. The transaction chart of accounts can contain secondary cost elements in addition to the FI accounts it normally contains. If you do not want to have a separate item for each secondary cost element, you can define items for a specific range of cost elements. You use the "Financial Statement Version" program to generate the extract in the sender system. You can then import this extract into the receiver system. Data is selected via the financial statement version, balance type "1" (balance carried forward up to and including the "To" period). The data extract is updated automatically in the "To" period defined for the extract. For business area consolidation purposes, the original business area is replaced by the consolidation business area in the data extract. You cannot use the periodic extract option for transferring 'planned data' since the "Financial Statement Version" program selects only actual data. (C) SAP AG AC665 3-15 Data Transfer Methods Periodic Extract Parameters: ECECCS Dimension: Business Area Consolidation Group: ... Ledger: US Fiscal Year Variant: Integrated Consolidation Types Company Business Area Profit Center Master Data Consolidation Units Data Transfer Methods Realtime update Rollup Periodic Extract Consolidation Staging Ledger 09 Company ###### FI Company Code #### SAP AG 1999 The system assigns the consolidation ledger defined in the global parameters to the integrated consolidation units. If the Consolidation system uses a different fiscal year variant than the units to be consolidated, the periods are converted when the financial data is transferred. If you use the periodic extract method, the system assigns the consolidation staging ledger (which has the fiscal year variant of the Consolidation system) to all company codes to which a company has been assigned. (C) SAP AG AC665 3-16 If you use the realtime update, periodic extract, or rollup method, the consolidation units and consolidation groups must be generated automatically. The data transfer method you choose will determine which organizational elements are proposed. If you wish, you can limit the selection of organizational elements. You can define a data transfer method for every dimension. You can define several hierarchies with various structures for each dimension. In the example above, you can see that two hierarchies have been defined for one dimension. In each hierarchy, you map a top node and the consolidation group of the parent company. Next, you decide how the consolidation groups are to be broken down - by business area, for example, or by company. (C) SAP AG AC665 3-17 Converting Organizational Units Data Transfer Method: Realtime Update FI Sender Receiver Business Area Consolidation ECCS Consolidation Unit Consolidation Chart of Accounts## Company/Business Area Version ### Company C10000 Company Code C100 ID combination !!! C10000-6000 Business Area 6000 SAP AG 1999 The transaction systems do not recognize the organizational units of EC-CS. This means that the transaction organizational units have to be converted to the consolidation units and groups of EC-CS. In the example above, the data from the transaction organizational unit "Business Area 6000" is converted into the corresponding consolidation unit when the data is transferred. You have to define ID combination rules for every consolidation type and dimension in every data stream. These rules can then be used to generate the consolidation hierarchy automatically. You define ID combination rules for each consolidation type. These rules are used to convert the transaction organizational units to the consolidation unit. You define the rules that you want the system to use to derive the IDs and names of the consolidation units and groups from the IDs of the organizational units in G/L accounting and profit center accounting. (C) SAP AG AC665 3-18 Organizational Units: Rules for ID Combination Consolidation Units Chemicals Pharma 4000 6000 C10000-6000 Palo Alto/Pharmaceuticals C20000-6000 New York/Pharmaceuticals Rules for ID Combination CS Org. Unit Grouping Category 1 0 2 FS item Org. Unit Prefix Length 1 1 2 2 1 1 1 6 2 1 2 4 6 - 4 1 Company C10000 C20000 C30000 IDES Palo Alto IDES New York IDES Chicago 2 Business Area Consolidation Groups 4000 6000 8000 9900 Chemicals Pharma Services Corporate/Other SAP AG 1999 Example: Business area consolidation CS organizational unit 1 Consolidation unit, 2 Consolidation group Grouping category 0 No grouping 1 Group by company 2 Group by business area Position 1 Name comes first 2 Name comes second Organizational unit 1 Company 2 Business area The prefix '-' separates the "name" from the organizational unit. The length of the ID for the consolidation unit / of the consolidation group is, for example, 10 characters (+ prefix) (C) SAP AG AC665 3-19 You can define several hierarchies with various structures for each dimension. The data transfer method you choose will determine which organizational elements are proposed. If you wish, you can limit the selection of organizational elements. If a posting does not have a valid business area, a consolidation group Business Area ”__” is generated with the appropriate consolidation units. The generated hierarchies can be postprocessed. You can also make mass changes if you wish. You can generate lists to analyze the organizational units from different perspectives: Transferred consolidation units Master data of the consolidation units that play an important role in integration Transaction system and client that the unit was transferred from This function allows you to check, for example, whether the data transfer method was maintained for all the consolidation units. In a future release, it will be possible to integrate consolidation units that were originally created manually. This will enable you to adapt the hierarchy of EC-CS organizational units to take into account any changes that were made in the sender system. (C) SAP AG AC665 3-20 Realtime Updates: Defining Document Types FI 100- ECCS 100 Dimension 02 Doc. type Cons C/A 01 01 Realtime update Postings in Version 100 Period MMM/YYYY Version 100 Number range 01 Version 200 Number range 02 Transaction currency Local currency Group currency TC LC GC 100- 100- 200- 100 100 200- Document no.: ### ### ##1 SAP AG 1999 If you use the realtime update method, the system generates documents. That is why you must define a document type for each dimension. By defining document types, you enable the system to pass on special information to the consolidation postings: information relating to the database update, how to handle deferred taxes, and what currencies to use. You can use customer-specific documents types for consolidation. These document types are then taken into account by reports and validations. The standard SAP System comes with one standard document type. If you need to define more document types, proceed as follows: Define the characteristics of the document type and the currencies to be posted (realtime update posting level). The posting of deferred taxes does not affect the realtime update method. Maintain version-based characteristics: Define a number range for your document numbers. The automatic reversal/cancellation function in the subsequent period is of no relevance to the realtime update method. (C) SAP AG AC665 3-21 Defining Data Streams Consolidation Type Dimension Company consolidation Business area consolidation Business areas Profit center consolidation Data Streams Cons chart of accounts Version 01 US Appr. In B/S,COGS Actual Active SAP AG 1999 When data is transferred, the system determines how each data record should be updated in the Consolidation system. It does this by looking at the definition and configuration of the data streams. For each combination of consolidation type and dimension, you define the consolidation chart of accounts and version to which you want the data to be transferred. More than one data stream can be flagged as active if you use the realtime update method. For each relevant data stream and dimension, the system determines the consolidation type, and uses this to define the rules for ID combination. Before you carry out this step, you have to make the other settings in the section "Integration: Preparation for Consolidation." After you have saved them, the settings for data transfer are active, and from this point the data can be transferred to consolidation. (C) SAP AG AC665 3-22 Data Transfer Methods: FI Data Unit Summary You are now able to: Describe the various data transfer methods and how to use them Make preparations in the sender and receiver systems for transferring data for the purposes of legal and management consolidation SAP AG 1999 (C) SAP AG AC665 3-23 Data Transfer methods-Exercises Unit: Data Transfer Methods: FI Data Topic: Data Transfer Methods At the conclusion of these exercises, you will be able to: Name and assign the various consolidation types and possible methods of data transfer available In the sender system, you have already made the settings and assignments required for transferring data to the Consolidation system. You now make the necessary preparations in the consolidation system. 1-1 For which consolidation types has the realtime update option been defined? _______________________________________________________________ 1-2 Additional Exercise: Which method of data transfer can you use for business area consolidation in distributed systems? _______________________________________________________________ 1-3 Additional Exercise: Explain the difference between a realtime update and a periodic extract to the person sitting beside you. _______________________________________________________________ (C) SAP AG AC665 3-24 Unit: Data Transfer Methods: FI Data Topic: Assignments in EC-CS At the conclusion of these exercises, you will be able to: Interpret the ID combination rules used to form consolidation groups and units Create a hierarchy of your own 2-1 Check to make sure that the correct consolidation types have been assigned to your course group’s dimensions. 2-2 Check over the ID combination rules defined for business area consolidation. 2-2.1 What are the naming conventions for consolidation units and groups (give examples)? _____________________________________________________________ _____________________________________________________________ (C) SAP AG AC665 3-25 2-3 Copy the hierarchy for dimension #2, and display it. Create hierarchies H1 and H2 (group by business area and company), and create a top consolidation group for each hierarchy. Place your cursor on the top node of hierarchy H1, and choose Business areas. Select the Same R/3 System and Hierarchy of business areas options. Confirm your data by pressing ENTER, and generate the consolidation areas and units without restricting them to specific companies/consolidation business areas. Repeat this procedure in order to generate the consolidation groups and units of your company hierarchy H2. Save your entries. Enter the fiscal year variant K4 for the integrated consolidation units. You are prompted whether to generate sets, which can be used later for your reporting. Please select the answer NO because of technical reasons. 2-3.1 Evaluate the master data, and check over the assignment of consolidation units to ledger and fiscal year variant. Define the data transfer method using the mass change function: R = Realtime update from FI. _____________________________________________________________ 2-4 Additional Exercise: Realtime update: Check the assignment of the accounts in operational chart of accounts CAUS to the items in consolidation chart of accounts 01. 2-5 Data streams: Check to see if the data stream for your dimension #2 has been activated. Explain to the person sitting next to you why it is possible to define more than one data stream for each dimension. Why is it possible to activate more than one data stream per dimension? (C) SAP AG AC665 3-26 2-6 Check to see which document type has been created for the realtime update method for dimension #2 “Business area consolidation gr. ##”. If necessary, enter a description. Create the following number range interval: Number range: 01 To fiscal year: current fiscal year Group-specific range: Example: Gr01: 0000001000 – 0000001999 Gr02: 0000002000 – 0000002999 Gr##: 00000##000 – 00000##999 2-7 What setting in EC-CS causes the system already during postings in accounting to check if the business area assigned in a document is valid for the respective company code? _____________________________________________________________ 2-8 Vendor IDES Chicago (company code C300) has delivered 1,000 USD worth of acetyl to IDES Palo Alto. Post an outgoing invoice for company code C300 against affiliated vendor PA##. The sales revenue is posted to account 8020## “Net sales - affiliated companies” (## = your course group number). Your instructor will tell you which tax rate to use for the posting. What you enter: Company code: Document date/posting date: C300 today’s date Check the company code by choosing Switch leading company code. Additional account assignment details: Profit Center C4311 (Acetyl), Partner Profit Center C6111 (AS), Business Area 4000 (Chemicals), Partner business area 6000 (Pharma) Save your entries and make a note of the document number: ________________. 2-8.1 Display the accounting document. Choose More data so that you can see the trading partner company you posted to. (C) SAP AG AC665 3-27 2-8.2 Now display the other accounting documents. _________________________________________________________ 2-8.3 Where do the additional account assignments come from? 2-9 IDES Palo Alto (company code C100) has received an invoice for 800 USD from vendor CH## for the AS goods delivered. The delivery was posted directly to the production expense account 4000## (## = your course group number). Post the incoming invoice in IDES Palo Alto. Your instructor will tell you which tax rate to use for the posting. What you enter: Company code: Document date/posting date: C100 today’s date Check the company code by choosing Switch leading company code. Additional account assignment details: Cost center C100C6111M (Manufacturing Product Acetyl) Profit Center C6111 (AS), Partner Profit Center Business Area Partner business area C4311 (Acetyl) 6000 (Pharma) 4000 (Chemicals) Save your entries and make a note of the document number: ________________. ______________________________________________________________ (C) SAP AG AC665 3-28 2-10 Additional Exercise: IDES Chicago has sold the raw material AS and certain services to IDES Palo Alto. Post the outgoing invoice to your customer account. What you enter: Company code: Document date/posting date: C300 current posting date Check the company code by choosing Switch leading company code. The sales revenue is posted to account 8020## “Net sales - affiliated companies”, along with an additional account assignment to the appropriate profit center and trading partner profit center. The sales revenue is divided among the business areas as follows: 40 % to business area 9900 Administration, Additional account assignments: Profit Center Partner business area Partner profit center C9902 (Admin.) 6000 (Pharmaceuticals), C6111 (AS) 60% to business area 4000 (Chemicals), Additional account assignments: Profit Center Partner business area Partner profit center C4311 (Acetyl) 6000 (Pharmaceuticals), C6111 (AS). Your instructor will tell you which tax rate to use for the posting. Save your entries and make a note of the document number: ________________. ______________________________________________________________ 2-10.1 Display the accounting document, and check the business area account assignment for the line items “Receivables” and “Tax”. (C) SAP AG AC665 3-29 2-11 You now have to prepare the closing operation Balance Sheet Readjustment. In order to post the balance sheet readjustment, you go to the IMG and define the reconciliation accounts 1449## (Receivables from Affiliates) and 1649## (Payables to Affiliates) along with the respective adjustment accounts. (##= your group number + 40) Entry 1: Reconciliation account 1440## Receivables from Affiliates (## = your group number + 40) Adjustment account 1449## Receivables from Affiliates, Adjustments (## = your group number + 40) Entry 2: Reconciliation account 1640## Payables to Affiliates (## = your group number + 40) Adjustment account 1649## Payables to Affiliates, Adjustments (## = your group number + 40) 2-12 Your instructor will start the “Readjust Balance Sheet” report for the entire course group. 2-12.1 Calculating the balance sheet readjustment: Your instructor will select the company codes. 2-12.2 Posting the balance sheet readjustment: Your instructor will delimit data as follows: Company codes: C100 and C300 Key date: last day of the month, current year Create entries Document Type: SU Posting date: last day of the month, current year Posting period: current period Post to profit center: no Audit trail with line items by documents 2-12.3 Display the adjustment documents, and check the adjustment postings. (C) SAP AG AC665 3-30 2-13 Additional Exercise Theoretical Task: Which basic setting is required if you want to use the periodic extract method of data transfer for business area consolidation? _____________________________________________________________ _____________________________________________________________ 2-14 Additional Exercise: Periodic Extract: Check whether a financial statement version has been defined in the system, and copy it to “GR##”. 2-15 Additional Exercise: Create a consolidation chart of accounts from your financial statement version. (C) SAP AG AC665 3-31 2-16 Additional Exercise Run the report for the balance sheet/P+L statement. Make the following settings on the selection screen: All selections Company codes/business areas of your course group Extract for business area consolidation financial statement version (your instructor will name it) Reporting year: current year Extract to consolidation: at business area level Since you have not posted any data to the consolidation staging ledger yet, do not execute the report! 2-17 Additional exercise: Theoretical question: In which EC-CS menu will you find the report for importing the extract to Consolidation? (C) SAP AG AC665 3-32 Data Transfer methods-Solutions Unit: Data Transfer Methods: FI Data Topic: Data Transfer Methods 1-1 For which consolidation types has the realtime update option been defined? SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the Sender System Activate data transfer The realtime update option has only been defined for the consolidation type “Business area consolidation.” Reason: Company consolidation has not been activated. The values for profit center consolidation are passed on to the Consolidation system by means of rollups. 1-2 Additional Exercise: Which method of data transfer can you use for business area consolidation in distributed systems? You can transfer data using the periodic extract method or the rollup method. (C) SAP AG AC665 3-33 1-3 Additional Exercise: Explain the difference between a realtime update and a periodic extract to the person sitting beside you. If you use the realtime update, data is updated immediately (realtime) in the Consolidation system. In this case, the group account number must be stored in the operational G/L accounts. This is identical to the items in the EC-CS chart of accounts used. If you use the periodic extract method, data is updated at the same time (realtime) in the consolidation staging ledger, extracted for the financial statement version by the FI report, and imported by an EC-CS report. In this case, a consolidation financial statement version must be defined in FI, and this FS version must be identical to the consolidation chart of accounts used in EC-CS. The following prerequisites must be met for both transfer methods: To ensure that the values can be transferred to consolidation units, the consolidation units must be formed on the basis of the operational organizational units. Furthermore, information on the partners involved must be available in the line items of the operational systems. (C) SAP AG AC665 3-34 Unit: Data Transfer Methods: FI Data Topic: Assignments in EC-CS 2-1 Check to make sure that the correct consolidation types have been assigned to your course group’s dimensions. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Assign integrated consolidation types to the dimensions 2-2 Check over the ID combination rules defined for business area consolidation. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Converting Organizational Units Define ID combination rules (C) SAP AG AC665 3-35 2-2.1 What are the naming conventions for consolidation units and groups (give examples)? Example of consolidation group: Hierarchy 01 (business areas): # Not assigned 4000 Chemicals 6000 Pharmaceuticals 8000 External Services 9900 Corporate and Others Hierarchy 02 (companies): C10000 IDES Palo Alto C20000 IDES New York C30000 IDES Chicago Example of consolidation unit: C20000-# C20000-6000 C20000-9900 (C) SAP AG AC665 3-36 IDES Company New York IDES New York Pharma IDES New York Corporate and Other 2-3 Copy the hierarchy for dimension #2, and display it. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Transfer Organizational Units Edit Hierarchies Create hierarchies H1 and H2 (group by business area and company), and create a top consolidation group for each hierarchy. Place your cursor on the top node of hierarchy H1, and choose Business areas. Select the Same R/3 System and Hierarchy of business areas options. Confirm your data by pressing ENTER, and generate the consolidation areas and units without restricting them to specific companies/consolidation business areas. Repeat this procedure in order to generate the consolidation groups and units of your company hierarchy H2. Save your entries. Enter the fiscal year variant K4 for the integrated consolidation units. You are prompted whether to generate sets, which can be used later for your reporting. Please select the answer NO because of technical reasons. 2-3.1 Evaluate the master data, and check over the assignment of consolidation units to ledger and fiscal year variant. Define the data transfer method using the mass change function: R = Realtime update from FI. SAP Reference IMG Enterprise Controlling Consolidation Preparation in the EC-CS Consolidation System Copy Organizational Units Evaluate the Master Data of the Organizational Units Mass change: SAP Reference IMG Enterprise Controlling Consolidation Master Data Organizational Units Consolidation Units Make mass changes To change/display a consolidation unit, choose the menu option Consolidation units Change. The fields are located in the Goto menu: (C) SAP AG Use the Assignment menu option to go to the fiscal year variant Use the Integration menu option to go to the data transfer method. AC665 3-37 2-4 Additional Exercise: Realtime update: Check the assignment of the accounts in operational chart of accounts CAUS to the items in consolidation chart of accounts 01. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Tools: Cons Chart of Accounts, Group Chart of Accounts, Financial Statement Version Copying FS Items Copying FS Items from an FI Chart of Accounts Compare FS items with accounts/cost elements 2-5 Data streams: Check to see if the data stream for your dimension #2 has been activated. Explain to the person sitting next to you why it is possible to define more than one data stream for each dimension. Why is it possible to activate more than one data stream per dimension? SAP Reference IMG Enterprise Controlling Consolidation Preparation in the EC-CS Consolidation System Copy Data Define Data Streams Select the desired consolidation type and choose “Data Streams”. When the data is updated, or a rollup is generated, the system determines how each data record is updated in the Consolidation system on the basis of the data stream definition and other Customizing settings. With realtime updates, multiple data streams can be active, whereas with rollups, you can specify the appropriate active data stream in the rollup definition. (C) SAP AG AC665 3-38 2-6 Check to see which document type has been created for the realtime update method for dimension #2 “Business area consolidation gr. ##”. If necessary, enter a description. Create the following number range interval: Number range: 01 To fiscal year: current fiscal year Group-specific range: Example: Gr01: 0000001000 – 0000001999 Gr02: 0000002000 – 0000002999 Gr##: 00000##000 – 00000##999 SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Collection of Data Realtime Update: Define Document Type Document type ZW is created. It was copied along with the dimension. You still have to define the number range. Choose : Number ranges/Automatic reversal Version 100, number range 01 Define number range Insert interval Confirm any messages that appear by pressing ENTER. Then save your entries. 2-7 What setting in EC-CS causes the system already during postings in accounting to check if the business area assigned in a document is valid for the respective company code? SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the Sender System Preparation and Activation of Data Transfer Activate Data Transfer The data transfer method “Business area consolidation” allows you to run an additional check on the company code/business area combination in the document. If you flag this option, a check in the Accounting system when postings are made in order to see if a business area defined in the document is compatible with the company code in question. In order to do this, the system reads the company code/business area assignments that you defined in the Preparation for Consolidation section of the IMG. (C) SAP AG AC665 3-39 2-8 Vendor IDES Chicago (company code C300) has delivered 1,000 USD worth of acetyl to IDES Palo Alto. SAP Menu Accounting Financial accounting Accounts receivable Document entry Invoice Post an outgoing invoice for company code C300 against affiliated vendor PA##. The sales revenue is posted to account 8020## “Net sales - affiliated companies” (## = your course group number). Your instructor will tell you which tax rate to use for the posting. What you enter: Company code: Document date/posting date: C300 today’s date Check the company code by choosing Switch leading company code. Enter the additional account assignments and scroll to the right: Profit Center C4311 (Acetyl), Partner Profit Center C6111 (AS), Business Area 4000 (Chemicals), Partner business area 6000 (Pharma) Save your entries and make a note of the document number: ________________. 2-8.1 Display the accounting document. Choose More data so that you can see the trading partner company you posted to. SAP Menu Accounting Financial accounting Accounts receivable Document Display 2.8.2 Now display the other accounting documents. SAP Menu Accounting Financial accounting Accounts receivable Document Display Environment Accounting documents 2-8.3 Where do the additional account assignments come from? Trading partner company: master record Profit center: Posting document (C) SAP AG AC665 3-40 2-9 IDES Palo Alto (company code C100) has received an invoice for 800 USD from vendor CH## for the AS goods delivered. The delivery was posted directly to the production expense account 4000## (## = your course group number). Post the incoming invoice in IDES Palo Alto. Your instructor will tell you which tax rate to use for the posting. SAP Menu Accounting Financial accounting Accounts payable Document Display Environment Accounting documents What you enter: Company code: Document date/posting date: C100 today’s date Check the company code by choosing Switch leading company code. Enter the additional account assignments and scroll to the right: Cost center Profit Center C6111 (AS), Partner Profit Center C4311 (Acetyl) Business Area 6000 (Pharma) Partner business area 4000 (Chemicals) C100C6111M (Manufacturing Product Acetyl) Save your entries and make a note of the document number: ________________. (C) SAP AG AC665 3-41 2-10 Additional Exercise: IDES Chicago has sold the raw material AS and certain services to IDES Palo Alto. Post the outgoing invoice to your customer account. SAP Menu Accounting Financial accounting Accounts receivable Document entry Invoice What you enter: Company code: C300 Document date/posting date: today’s date Check the company code by choosing Switch leading company code. The sales revenue is posted to account 8020## “Net sales - affiliated companies”, along with an additional account assignment to the appropriate profit center and trading partner profit center. The sales revenue is divided among the business areas as follows: 40 % to business area 9900 Administration, Additional account assignments: Profit Center Partner business area Partner profit center C9902 (Admin.) 6000 (Pharmaceuticals), C6111 (AS) 60% to business area 4000 (Chemicals), Additional account assignments: Profit Center Partner business area Partner profit center C4311 (Acetyl) 6000 (Pharmaceuticals), C6111 (AS). Your instructor will tell you which tax rate to use for the posting. Confirm the warnings issued by the system by pressing ENTER and post the invoice to your customer account. Please make a note of the document number: ____________ 2-10.1 Display the accounting document, and check the business area account assignment for the line items “Receivables” and “Tax”. SAP Menu Accounting Financial accounting Accounts receivables Document Display (C) SAP AG AC665 3-42 2-11 You now have to prepare the closing operation Balance Sheet Readjustment. In order to post the balance sheet readjustment, you go to the IMG and define the reconciliation accounts 1449## (Receivables from Affiliates) and 1649## (Payables to Affiliates) along with the respective adjustment accounts. (##= your group number + 40) SAP Reference IMG Enterprise Controlling Consolidation Integration Preparation in the Sender System Further Settings for Business Area Consolidation Financial Accounting Store Accounts for Readjustments Select adjustment accounts for reconciliation accounts. Enter chart of accounts CAUS. Entry 1: Reconciliation account 1440## Receivables from Affiliates (## = your group number + 40) Adjustment account 1449## Receivables from Affiliates, Adjustments (## = your group number + 40) Entry 2: Reconciliation account 1640## Payables to Affiliates (## = your group number + 40) Adjustment account 1649## Payables to Affiliates, Adjustments (## = your group number + 40) (C) SAP AG AC665 3-43 2-12 Your instructor will start the “Readjust Balance Sheet” report for the entire course group. SAP Menu Accounting Financial accounting General ledger Periodic processing Closing Regroup Balance sheet readjustment 2-12.1 Calculating the balance sheet readjustment: Your instructor will select the company codes. SAP Menu Accounting Financial accounting General ledger Periodic processing Closing Regroup B/S readjustment Calculate 2-12.2 Posting the balance sheet readjustment: Your instructor will delimit data as follows: Company codes: C100 and C300 Key date: last day of the month, current year Create entries Document Type: SU Posting date: last day of the month, current year Posting period: current period Post to profit center: no Audit trail with line items by documents SAP Menu Accounting Financial accounting General ledger Periodic processing Closing Regroup B/S readjustment Post 2-12.3 Display the adjustment documents, and check the adjustment postings. SAP Menu Accounting Financial accounting Accounts payable Document Display Environment Balance sheet readjustment (C) SAP AG AC665 3-44 2-13 Additional Exercise Theoretical Task: Which basic setting is required if you want to use the periodic extract method of data transfer for business area consolidation? A financial statement version must be defined in the sender system, and the items in this FS version must be the same as the items in the consolidation chart of accounts in the Consolidation system. You might have to define the currency of the consolidation staging ledger. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the Sender System Preparation and Activation of Data Transfer Periodic Extract from the Consolidation Staging Ledger Maintain the currency of the consolidation staging ledger In the IMG, you define the data transfer method Periodic extract, and assign it to consolidation units. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the Sender System Preparation and Activation of Data Transfer Activate Data Transfer 2-14 Additional Exercise: Periodic Extract: Check whether a financial statement version has been defined in the system, and copy it to “GR##”. SAP Reference IMG Financial Accounting General Ledger Accounting Accounting Transactions Closing Documenting Define Financial Statement Versions 2-15 Additional Exercise: Create a consolidation chart of accounts from your financial statement version. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Tools: Cons Chart of Accounts, Group Chart of Accounts, Financial Statement Version Copying FS Items Copy item hierarchies from financial statement version (C) SAP AG AC665 3-45 2-16 Additional Exercise Run the report for the balance sheet/P+L statement. Make the following settings on the selection screen: All selections Company codes/business areas of your course group Extract for business area consolidation Financial statement version KONS Reporting year: current year Extract to consolidation: at business area level Since you have not posted any data to the consolidation staging ledger yet, do not execute the report! SAP Menu Accounting Financial accounting General ledger Periodic processing Closing Report General Ledger Reports Balance sheet/P&L/Cash flow General Actual/Actual Comparisons Balance sheet/P&L Choose Execute 2-17 Additional Exercise Theoretical Question: In which EC-CS menu will you find the report for importing the extract to Consolidation? SAP Menu Accounting Enterprise Controlling Consolidation Data Collection Reported financial data Periodic Extract Choose “Integrated Consolidation Type: Business Area Consolidation”. (C) SAP AG AC665 3-46 Consolidation Activities and Reporting Contents Working Through Consolidation Activities Reporting SAP AG 1999 (C) SAP AG AC665 4-1 Consolidation Activities and Reporting: Unit Objectives At the conclusion of this unit, you will be able to: Give reasons for having consolidation within an enterprise Name the various steps involved in consolidation SAP AG 1999 (C) SAP AG AC665 4-2 Course Overview Diagram EIS BP Executive Business Information Planning System EC-CS Consolidation Dimension FI Data PCA Data EC-PCA Profit Center Accounting FI-GL General Ledger SAP AG 1999 (C) SAP AG AC665 4-3 CO Controlling Consolidation Activities and Reporting: Business Scenario You attend a presentation where you learn about the various steps involved in consolidation, and you test some of the Consolidation functions yourself You have also been asked to find out if there are any useful key figure reports that can be used to analyze consolidated business area data SAP AG 1999 (C) SAP AG AC665 4-4 Preparing Consolidation Activities and Reporting FI Document reconciliation Adjustment EC-CS Data monitor: Balance carried forward Enter additional financial data Consolidation monitor: Consolidation activities and reporting SAP AG 1999 FI: You carry out the document matching with partner company codes and the adjustment of the business areas within the periodic closing operations. EC-CS: You execute the consolidation with the help of configured tasks. (C) SAP AG AC665 4-5 Carrying Forward Balances Carry Forward Closing Balance Opening Balance Old Year New Year Balance Sheet Assets 10,000 ... Liabilities 10,000 Balance Sheet Assets 10,000 ... Liabilities 10,000 Income Statement Net inc. 1,000 Income Statement Balance carried forward 1,000 n+1 SAP AG 1999 The closing financial statement of a year must be the same as the opening financial statement of the following year. Consequently, the first task (of the data monitor) in a given year is to carry forward the balances from the previous year to the current year. The way in which a balance is carried forward will depend on the item category in question. In the standard system, you proceed as follows: ­ All financial statement items are carried forward to themselves. ­ In the standard system, income statement items are not carried forward. However, if an appropriation of retained earnings is required after the income statement has been drawn up, the previous year's annual net income must be carried forward to the balance carried forward of the current fiscal year. ­ You can specify whether statistical items should be carried forward to themselves. You do this in the master record of the item in question. If items are to be carried forward, but not to themselves (this is the case with the appropriation of retained earnings in the balance sheet), you will have to make other Customizing settings. The balance is carried forward on the basis of the dimension (per consolidation group or for individual units), the version and the consolidation chart of accounts. (C) SAP AG AC665 4-6 Data transfer from SAP Systems Realtime update from other SAP components within the same SAP System Rollup from an FI-SL ledger Periodic extract from FI-GL Periodic extract from an FI-LC system Rollup from another EC-CS system Periodic extract from R/2 (planned) Data transfer from non-SAP systems Flexible upload of data extracts from non-SAP systems MS Access offline data entry with an additional MS Excel interface (C) SAP AG AC665 4-7 EC-CS: Entering Additional Financial Data Consolidation of Investments: - Changes in investee equity - Changes in investments Elimination of Interunit Profit and Loss in Transferred Inventory: - Inventory data - Supplier data SAP AG 1999 Consolidation of Investments: The task called "Data Collection" involves entering additional financial data for first consolidation and subsequent consolidation. Changes in investee equity and investments are entered in additional financial data for both the parent unit, and the investee unit. Elimination of Interunit Profit and Loss in Transferred Inventory: You eliminate interunit profits and losses resulting from the transfer of inventory items. The elimination data is based on the data of the inventory-managing and supplier unit. The IU profit or loss is the difference between the book value on the individual financial statement and the production cost. A positive difference represents interunit profit, which is eliminated by making an adjustment down to the lower level, in accordance with the group's point of view. (C) SAP AG AC665 4-8 Determining Contra Items Consolidation task Define contra item/retained earnings Edit item: Assign contra item Consolidation Items Item Contra item 1201 2011 Receivables Payables 2011 1201 Consolidation Monitor Execute consolidation task: Item substitution and calculation of retained earnings 1201 Receivables 2011 Payables OLD -1000 NEW 0 0 -1000 SAP AG 1999 When postings are made to bank accounts, the overall balance can be switched to the credit side in FI. This means that the account balance cannot be represented under current assets. In the financial statement version, the contra item is used to assign the overall account balance automatically to the liabilities side of the item "Short-term payables". In EC-CS, if the contra item is entered in the FS item table, this means that it is possible to automatically transfer the balance of the corresponding item when the debit/credit sign changes. The transfers are stored in the totals database (at posting level '_' (space). (C) SAP AG AC665 4-9 Calculating Retained Earnings: Selected Items IDES Chicago, Services Assets Liabilities IDES Chicago, Chem. 30 Assets Liabilities Transaction (1): 50- (1) Dr: Expense (Services) Cr: Payables (Chemicals) 50 (2) Retained 100- earnings (3) Expense 50 50- Revenue Expense Revenue (1) (2) 100 (3) Annual net Business Business Area Area Clearing Clearing (2): (2): Balancing Balancing Adjustment Adjustment Item: Item: Dr: Dr: Business Business Area Area Clearing Clearing (Chemicals) (Chemicals) Cr: Cr: Business Business Area Area Clearing Clearing (Services) (Services) income Dr: Annual Net Income 100 Cr: Retained Earnings 100- (3) SAP AG 1999 If you use the realtime update method, the consolidation items are updated every time a posting is made. Retained earnings are not posted in FI. Instead, they are calculated as the balance of all expenses and revenues. You start this task after end-of-month closing, when all the postings in a period are closed, and post the retained earnings in the Consolidation system. If you use the periodic extract method for all consolidation units, you do not need to execute this task. In EC-CS, you post this difference to selected items in the financial statements and income statement. This will then mean that the total of all balance sheet items and income statement items will be zero, respectively. You manage the values for annual net income and retained earnings for the same item in the consolidation chart of accounts. If you start this task in an integrated dimension for consolidation type 2 (business area consolidation) or 3 (profit center consolidation), the financial data posted is reconciled at the company code/business area or company code/profit center level. (C) SAP AG AC665 4-10 The concept of user-defined validation is employed in many SAP applications. Validations are available in addition to the standard checks in the EC-CS posting transaction. You can run validation when processing the following: Document header Individual document line Complete document Validation for a consolidation unit typically takes place after data collection (in local currency) and currency translation (into group currency). Validation across consolidation units or dimensions is essential for ensuring reconciled data in legal and management consolidation. (C) SAP AG AC665 4-11 The currency translation task enables you to translate financial data reported by consolidation units in their local currency into the currency of the consolidation group. Currency translation is based on translation methods. You can define several methods for translating data reported by your consolidation units. However, for each unit you specify a single translation method. The type of currency translation you use depends on the relationships between your corporate group and its individual consolidation units, and also on the economic situation in the countries where these units are based. You can define any of the commonly-used translation methods for your chart of accounts (temporal method, current-rate method, and so on). (C) SAP AG AC665 4-12 Data Monitor Tasks Hierarchy of Overall Groups/Units status BCF - Collect. Calc RE Val.FD SE ... Segments ... Trans Val.SFD ... ... + Chemicals - Pharmaceuticals - Europe - USA - APA + Services + Corporate Other User-defined tasks Traffic light for "overall" status Perform tasks in test mode/update mode Audit information Filter options SAP AG 1999 The data monitor and the consolidation monitor control the status of the consolidation process, and tasks can be started directly from within the monitor. Each monitor can cover an unlimited number of tasks. Tasks are user-defined. They are grouped together into task groups that contain information on the sequence of the tasks. Task groups are assigned to dimensions. In our example, the following tasks have been defined: Carry forward balance (BCF), Collect data (Collect.), Calculate retained earnings (Calc.RE), Validate financial data (Val. FD), Standardizing entries (SE), Translate currency (Trans), Validate standardized financial data (Val. SFD). . . Overall status of consolidation units and consolidation groups Initial stage, open, errors, OK Detailed status per task Initial stage, open, errors, OK, blocked, unblocked, irrelevant Last changed by/on (date), number of errors/warnings Actions that are possible: Open/close period. Execute tasks in test/update mode. Block/unblock tasks. Execute all tasks up to next milestone. (C) SAP AG AC665 4-13 Consolidation Monitor Tasks Overall Hierarchy of groups - status El. Pay/Rec. El. Inv.income Invest. Hierarchy 1 + CG Chemicals - CG Pharma. + CG Services + CG Corporate/ Other Milestone CG: Consolidation Group SAP AG 1999 (C) SAP AG AC665 4-14 Validation GC Interunit Elimination IDES Group Chemicals Chicago Pharmaceuticals .... Palo Alto Chicago New York ... Item Amount Partner Item Amount Partner Item Amount Partner Receiv. 20 Pharma/ Palo Alto Pay. ... ... Receiv. 50 ... - 20 Chemicals/ Chicago ... Pay. SAP AG 1999 Interunit elimination is based on information on the partner consolidation unit. (C) SAP AG AC665 4-15 -60 Chemicals/ Chicago Document Matching EC-CS Consolidation Elim. of IU Pay./Receiv. Cons Unit Master Record Elimination method Prep. of Indiv. Financial Statements Bal. 1 Bal. 2 Document Matching CCd 1 /CCd 2, Ref.no. 4711 Diff. CU A / B 1200 CU A / C - 600 700 100 CU B / C 400 - 350 50 Accounting Document - 1000 200 Item details Elimination Entry Open Item Master Record Document date: 3/22/96 Drilldown Still to be assigned: CCd 1 Mail CCd 2 Notes Customer/ vendor Assignment (Ref. no.) SAP AG 1999 The reconciliation of group-internal payables and receivables is often a time-consuming task. SAP's Financial Accounting application enables efficient document matching to be run during the fiscal year, thereby reducing the time required for the elimination. The consolidation user responsible for a particular company code specifies one or more "partner" company codes with which reconciliation is to be run. The assignments of customers and vendors to companies are used to select and display all open items. Document matching is a process comprising several steps: Documents with the same reference number are identified as matches. The system then sorts into groups those documents posted with the same document date, whose values differ below a tolerance defined by the user. The remaining documents are displayed in two windows and processed manually by the user (by means of mails to other users, notes, subsequent maintenance of reference number). You can also access the document matching program from the transaction for reconciling balances when you eliminate IU payables and receivables. This enables users to perform drilldown reporting right down to the FI document level. (C) SAP AG AC665 4-16 The Report Writer and Report Painter: Powerful, user-friendly, standard SAP tools for creating reports Special handling of version and time dependencies for consolidation groups Interactive drilldown reports: Interactive navigation in the data cube of Consolidation Exception reporting, ABC analyses, comments, e-mail, integration with MS Office Journal entry reports: Flexible selection and hierarchical display of all consolidation documents Interactive Excel: Logons to R/3 from within MS Excel, interactive connection (ensures current data) with R/3 (C) SAP AG AC665 4-17 Consolidation Activities and Reporting: Unit Summary You are now able to: Give reasons for having consolidation within an enterprise Name the various steps involved in consolidation SAP AG 1999 (C) SAP AG AC665 4-18 Exercises Unit: Consolidation Activities and Reporting Topic: Consolidation Activities At the conclusion of these exercises, you will be able to: Name and work through some consolidation activities Now that you have made preparations for transferring data to the Consolidation system, you can test working through a few consolidation activities. You also test data transfer by using key figure reports. 1-1 Check in the Implementation Guide to see if a task: entitled Contra item/Retained earnings item has been defined. What is the purpose of this task? 1-2 Selected items for consolidated statements are defined in the consolidation chart of accounts. The values of these selected items are not transferred directly from the transaction data in the individual financial statements to the Consolidation system. For example, the annual net income is calculated in the financial statement first, and then transferred to the corresponding consolidation item. Which selected items have been defined for your dimension? 1-3 Start the data monitor from the EC-CS application menu. Execute the task Retained Earnings/Contra Item for your dimension #2 (business area consolidation). Choose Show tasks. Close all tasks in the data monitor except for the Retained Earnings/Contra Item task. Place your cursor on a consolidation group below the Retained Earnings/Contra Item task, and choose Update run. Look at the log, then close the task. (C) SAP AG AC665 4-19 1-4 When you copied the dimension, you did not copy the organizational units as well. For this reason, you now need to go into EC-CS Customizing, and define validation rule CS10000 for the master data. This rule affects the validation of reported and standardized financial data. What is the quickest way of changing this data en masse? You change the consolidation units and save the results. Then you execute the task Validate Standardized Financial Data in the data monitor. Look at the log, then close the task. 1-5 You have copied document types and number ranges in your dimension so that you can execute the tasks “Elimination of IU payables and receivables” and “Elimination of IU revenue and expense.” You still require a number range before you can run an update run for the tasks. Define the number range interval for number range 03 for document type 21 (elimination of IU payables and receivables) and for document type 22 (elimination of IU revenue and expense). 1-6 In the Consolidation Monitor, execute the task “Elimination of IU payables and receivables” (I2100) for your dimension #2. Choose Show tasks Hide texts Place your cursor on a consolidation group below the task “Elimination of IU payables and receivables”, and choose Update run. Execute task I2100 (elimination of IU payables and receivables). Look at the log, then close the task. (C) SAP AG AC665 4-20 Solutions Unit: Consolidation Activities and Reporting Topic: Consolidation Activities 1-1 Check in the Implementation Guide to see if a task: entitled Contra item/Retained earnings item has been defined. What is the purpose of this task? SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Collection of Data Contra item/Determination of retained earnings: Define task Task 1110 transfers the contra items and retained earnings determined by the FI balance sheet report to the corresponding items in the EC-CS consolidation chart of accounts. 1-2 Selected items for consolidated statements are defined in the consolidation chart of accounts. The values of these selected items are not transferred directly from the transaction data in the individual financial statements to the Consolidation system. For example, the annual net income is calculated in the financial statement first, and then transferred to the corresponding consolidation item. Which selected items have been defined for your dimension? SAP Reference IMG Enterprise Controlling Consolidation Master Data Financial Statement Items Define Selected Items for Posting Selected items: Annual net income Retained earnings - current year: 251200, subitem 120 Annual net income: 390000 Deferred income taxes, Deferred income taxes (debit): 150100 (deferred tax assets) Deferred income taxes (credit): 225200 (deferred taxes payable - state) Deferred income taxes (income statement): 350100 (Income tax provision - deferred) Remaining items Balance sheet business area clearing: 239999 Retained earnings, prior year (Dr, Cr): 251100, subitem 120 (C) SAP AG AC665 4-21 1-3 Start the data monitor from the EC-CS application menu. Execute the task Retained Earnings/Contra Item for your dimension #2 (business area consolidation). Choose Show tasks. Close all tasks in the data monitor except for the Retained Earnings/Contra Item task. Place your cursor on a consolidation group below the Retained Earnings/Contra Item task, and choose Update run. Look at the log, and then close the task. SAP Menu Accounting Enterprise Controlling Consolidation Data Monitor 1-4 When you copied the dimension, you did not copy the organizational units as well. For this reason, you now need to go into EC-CS Customizing, and define validation rule CS10000 for the master data. This rule affects the validation of reported and standardized financial data. What is the quickest way of changing this data en masse? SAP Reference IMG Enterprise Controlling Consolidation Master Data Organizational Units Consolidation Units Make Mass Change After you assign the validation rule to the consolidation units, run the task Validate Standardized Financial Data. Look at the log and then close the task. 1-5 You have copied document types and number ranges in your dimension so that you can execute the tasks “Elimination of IU payables and receivables” and “Elimination of IU revenue and expense.” You still require a number range before you can run an update run for the tasks. Define the number range interval for number range 03 for document type 21 (elimination of IU payables and receivables) and for document type 22 (elimination of IU revenue and expense). Data: Version: Number range: Year: From number: To number: 100 03 Current year 3000000000 0399999999 SAP Reference IMG Enterprise Controlling Consolidation Consolidation Functions Automatic Posting Interunit Elimination Define Document Types (C) SAP AG AC665 4-22 Select document type 21 or 22. Choose Number ranges/Automatic reversal Version 100, number range 03 Define number range Insert interval Confirm any messages that appear by pressing ENTER. Then save your entries. 1-6 In the Consolidation Monitor, execute the task “Elimination of IU payables and receivables” (I2100) for your dimension #2. SAP Menu Accounting Enterprise Controlling Consolidation Consolidation Tasks Monitor Choose Show tasks Hide texts Place your cursor on a consolidation group below the task “Elimination of IU payables and receivables”, and choose Update run. Execute task I2100 (elimination of IU payables and receivables). Look at the log, then close the task. 1-7 In the Consolidation Monitor, execute the task “Elimination of IU revenue and expense” (I2200) for your dimension #2. SAP Menu Accounting Enterprise Controlling Consolidation Consolidation Tasks Monitor Choose Show tasks Hide texts Place your cursor on a consolidation group below the task “Elimination of IU revenue and expense”, and choose Update run. (C) SAP AG AC665 4-23 Execute task I2200 (elimination of IU revenue and expense). Look at the log, then close the task. (C) SAP AG AC665 4-24 Integrated Data Transfer: EC-PCA Contents Profit Centers and Profit Center Hierarchy Origin of Profit Center Values Integration of EC-PCA and FI Preparation for Profit Center Consolidation Partner Relationships SAP AG 1999 (C) SAP AG AC665 5-1 Integrated Data Transfer: EC-PCA Unit Objectives At the conclusion of this unit, you will be able to: Prepare the data transfer for management consolidation. SAP AG 1999 (C) SAP AG AC665 5-2 Course Overview Diagram EIS BP Executive Business Information Planning System EC-CS Consolidation Dimension FI Data PCA Data EC-PCA Profit Center Accounting FI-GL General Ledger SAP AG 1999 (C) SAP AG AC665 5-3 CO Controlling Integrated Data Transfer: EC-PCA Business Scenario The company puts you in charge of preparing profit center consolidation. SAP AG 1999 (C) SAP AG AC665 5-4 Data Stream COCO-PA EIS BP Executive Business Information Planning System HR EC-CS Consolidation PCA Data Consolidation Unit Profit Center/Company EC-PCA Profit Center Accounting Profit Center, Company Code FI-GL General Ledger SD MM Bal. Sheet Account P&L Account Acc. Assign. to CO object Assets Receivables Payables WIP Inventory Other CO Controlling Cost Center Order Project SAP AG 1999 Example: Company sells a product to an affiliated company. (The presentation of this processes is in the appendix.) If the receivable is paid, receivables and tax in FI are reclassified to the profit centers at the period end by means of the "Balance sheet adjustment" program. In EC-PCA, the balance sheet items "Receivables/payables" are then periodically transferred for each company code. Other FS items can be transferred either periodically or online, as required: for example assets, material stocks, work in process, receivables and payables. This enables you to analyze financial key figures (profit-sales ratio, return on investment) for each profit center. For the purposes of profit center consolidation, data can be transferred by rollup. In this case, consolidation groups are formed for the profit centers to be consolidated. The consolidation units are generated together with the companies. The aim of this process is to create financial statements for profit centers in which the internal relationships between the consolidation units of these profit centers are eliminated. (C) SAP AG AC665 5-5 Profit Center Hierarchy Group SEG A Pharma & Chemicals SBU Chemicals SBU Pharmaceuticals DIV Analgesics DIV Medical Substances Acetyl H-Insulin SEG B Services Mono Combo SEG C Corporate and Others Strategic Business Unit DIV Diabetical Products H-Insulin A-Insulin Division Product Line Paracetamol AS PCM Insulin H-Insulin Product SAP AG 1999 The profit center is an area of responsibility within the enterprise for which an internal computation of income can be carried out. You can group your enterprise according to the following criteria: - geographical (locations, plant), - functional (production, sales and distribution), - product related (material groups, divisions) - according to matrix type (product/region) In Profit Center Accounting, you can use a complete standard hierarchy, subhierarchy, or individual profit centers as selection criteria in the information system. You can use accounts (cost/revenue elements, P&L accounts, and balance sheet items) as evaluation factors. When you maintain the settings for cost accounting, you create the top node or group of the standard hierarchy. If your cost center structure is similar to your profit center structure, you can create your profit center standard hierarchy by copying the the cost center standard hierarchy. You can also create and evaluate alternative hierarchies. (C) SAP AG AC665 5-6 You store the most important control parameters and assignments in the settings for the controlling area. When you maintain the master data, you can create the standard hierarchy, profit centers, as well as profit center groups. Dummy Profit Center: This is used in all postings to objects that are not assigned to a particular profit center. Postings to the dummy profit center also enable you to detect missing assignments. The data in the dummy profit center can be forwarded to the actual profit center by means of assessment or distribution. You can assign account assignment objects from Logistics and Financial Accounting to the profit center, and check the assignments. Control parameters for actual postings: Activating profit center consolidation in EC-CS enables you to determine (in EC-PCA) for a client's affiliated companies which partner profit centers have to be reread from the purchase order/sales order. (C) SAP AG AC665 5-7 Profit Center: Master Record Fixed Assignment Profit Center - Company Code Controlling Area FI Company Code Palo Alto Chicago Profit Center C6111 New York ECECCS Limited Number of Consolidation Units SAP AG 1999 When you create a profit center, you can choose the company code(s) in which the profit center should be booked. The consequence of this for postings in FI is that only permitted profit centers can be posted. In EC-CS, only the consolidation units of the profit centers and companies that transact in the company code(s) are generated. (C) SAP AG AC665 5-8 The master data of each object to which costs or revenues are assigned contains an assignment to a profit center. Deliveries and services between profit centers are also handled. When an assignment to an account is carried out, the data is automatically updated statistically to the assigned profit centers, and structured according to cost and revenue elements. With the help of the assignment monitor for the selected assignment objects, incorrect assignments can be detected and corrected. In the case of internal goods movements, the profit center is determined by means of the combination plant/material. This supports a product oriented or regional profit center structure. The same rules are applied in the case of sales orders. If the structure of EC-PCA is sales oriented, however, you can also use substitution rules to determine the profit center from the fields in the sales order header, or from the sales order item. This supports a profit center structure that deviates from the product related dimension. The balances in the individual balance sheet items (for example, assets, material stocks, work in process, receivables and payables) can likewise be posted to the assigned profit centers. This enables you to analyze financial key figures (profit-sales ratio, return on investment) for each profit center. (C) SAP AG AC665 5-9 Profit Center Origin: Asset Master Record Acquisition and Production costs Asset Transfer data online/ periodically 1 Time-dependent Data Business Area Cost center 4000 C100C4311M ECPCA FI-AA Post Depreciation Cost Center C100C4311M • • • C4311 C4311 Company Code C100 Business Area 4000 Profit Center Order Depreciation Areas Trade Law Order ########## • Company Code C100 • Business Area 4000 • Profit Center C4311 C4311 ... Costing SAP AG 1999 Example of how a profit center is derived: For cost accounting purposes, an asset can be assigned either to a cost center or to an order. Both CO objects are assigned to a company code, a profit center, and a business area when profit center accounting or business area balance sheets is activated. When acquisition and production costs are posted to the asset, the profit center and the business area are derived on the basis of the cost center or the order. The profit center receives the asset balance sheet value of the acquisition and production costs when the balance sheet items are transferred. In this case, you can choose either periodic or online updating of the balance sheet accounts in EC-PCA. However, the opening balance always has to be transferred for the first time with a transaction. Periodic depreciation is posted to cost center or internal order, and the profit center is derived on the basis of this and assigned values. (C) SAP AG AC665 5-10 Value flows in Controlling and their effects on a group's balance sheet/profit and loss accounts must be transferred to FI. To meet these demands, CO data is summarized and analyzed in the reconciliation ledger. If allocations were carried out across functional area, these transactions can be entered automatically in CO, and posted to FI. You require this information if you want to calculate profit and loss using cost of sales accounting. The reconciliation ledger performs the following tasks: It summarizes reconciliation of the CO accounts with FI It forms the basis for creating allocation postings in the general ledger when there are value flows between two functional areas. (C) SAP AG AC665 5-11 Preparation for Profit Center Consolidation SAP AG 1999 (C) SAP AG AC665 5-12 Global Session Parameters ConsGroups FS Items Data Monitor ConsMonitor Infosystem Parameters ECCS Global Parameters Dimension Version Year Period 03 Profit Center 100 Actual Data YYYY 012 Cons C/A Ledger 01 US US Chart USD SAP AG 1999 If you wish to prepare profit center consolidation, you first have to create the appropriate dimension. When you have done this, you can go on to specify the global session parameters. (C) SAP AG AC665 5-13 Profit Center Consolidation: Hierarchy H1 SEG A Pharma & Chemicals ... SBU Pharmaceuticals ... DIV Painkillers Mono AS ASPalo Alto PCM ... DIV Insulin Combo H-Insulin Insulin InsulinPalo Alto Consolidation Groups ... H-Insulin InsulinNew York Consolidation Units SAP AG 1999 In our example, the dark-shaded business units correspond to nodes in the profit center hierarchy. In consolidation, these are used to generate the consolidation groups. In consolidation, the profit centers are likewise represented as consolidation groups. The consolidation units are generated on the basis of the combination of companies and profit centers. In profit center consolidation, you have a number of options for generating hierarchies: You can generate one or more consolidation group hierarchies, which show the standard hierarchy or alternative hierarchies from EC-PCA, You can generate consolidation groups that show the companies, and are used for the reconciliation with the units of company consolidation. When you create the profit center, you can specify the company codes in which the profit center is used, and this allows you to focus on the relevant units and groups. In the above example, the Palo Alto company uses the profit center 'AS'. This allows you to prevent all the profit centers from being combined with all the companies when the hierarchy is automatically created. Finally, you should check over the combination of company codes and profit centers. (C) SAP AG AC665 5-14 To enable consolidated results to be identified on any node in the profit center hierarchy, interunit sales (in other words, the sales between profit centers of the same consolidation group) have to be eliminated. These eliminations require partner information on the profit center/company level. The partner profit center and trading partner are determined on the basis of the customer or vendor master record, and updated to profit center accounting. For this purpose, the companies have to be stored in a central SAP System, and the SD or MM modules have to be used. Otherwise, you can determine the partner profit centers by means of substitution rules or via user exit. When the sales order for the purchase order is created, the SAP purchase order number in the order header is entered as partner information. The relevant purchase order item is specified in the order items, thus creating a link between the sales order and the purchase order on which it is based. This data is checked in the sales order if the customer is a trading partner whose partner information is to be determined. When the customer invoice is transferred to Financial Accounting the source purchase order is also accessed. If the purchase order items are assigned to several profit centers, the sales revenue line is split according to partner profit centers, and posted to profit center accounting in differentiated form. (C) SAP AG AC665 5-15 Logistics: Partner Profit Center Distributed Systems: Preparation for Consolidation in EC-PCA : Specify default partner profit center in purchasing and sales Settings Actual Postings SAP AG 1999 If the partners are in different clients or systems, you can maintain derivation rules that can be used to determine the partner profit center in purchasing or in sales. The partner profit center is derived from the following source fields or a combination of these fields: Purchasing: vendor number, material number, trading partner, sender profit center. Sales: vendor number, material number, trading partner, sender profit center. For each derivation step, you can maintain several derivation rules, which the system runs sequentially. If a default value is found for the target field, this is transferred, and the other derivation rules are not run. You can also use the derivation rules to determine the partner profit center in a client. (C) SAP AG AC665 5-16 LO Partner Assignment: One-Client System Customer Supplier Company Code C100 PrCtr C6111 Company Code C300 PrCtr C4311 Purchase Order (1) SD-Worklist Company C10000 Profit Center C6111 Delivery (2) Company C30000 Profit Center C4311 Picking (3) Goods Receipt (5) Goods Issue (4) Incoming Invoice (7) Customer Invoice (6) SAP AG 1999 If companies are in the same client of your system, and if you use the SAP MM or SD components, then you store the affiliated companies in EC-PCA, and specify the companies for whom the partner profit center is to be determined by reading the source purchase order or the sales order. The reading function is activated for each trading partner in EC-PCA Customizing. If the relevant enterprise then occurs as a partner, the key figure "Purchase order/Sales order" can be used to decide whether partner business area and partner profit center can be derived on the basis of the purchase order or the sales order. In business area consolidation, the corresponding trading partner area is also determined according using this procedure. An example of reading the partner profit center is given in the appendix (stock transport order). (C) SAP AG AC665 5-17 Balance Sheet Profit Centers Consolidated Group SEG Pharma & Chemicals SGE Pharma DIV Diabetic Profit Center AS SGE Chemicals DIV Analgesics Product Line Mono SEG Services BIL BU Pharma BIL DIV Analgesics Profit Center PCM Balance Sheet Profit Center Pharma Balance Sheet Profit Center Analgetics SAP AG 1999 The balances in individual balance sheet items (for example, fixed assets, material stocks, work in process, receivables and payables) can also be assigned to profit centers. This enables you to analyze financial key figures (profit-sales ratio, return on investment) for each profit center. Example of use of an additional balance sheet profit center: Two profit centers are located in one building. The costs for the building and its maintenance cannot be allocated directly to the transaction profit center, since it carries product related values. Instead, on the division level, you can create a balance sheet node and a balance sheet profit center belonging to it, and can then post the rent to it, for example. If one of the two profit centers were to leave the building, the increase in costs would not fall to the remaining profit center or the product level. On the division level, you can use the balance sheet profit center to evaluate key figures, such as RONA (Return on Net Assets). The balance sheet profit center is booked manually. This allows you to decide whether the acquired shares of a subsidiary should be assigned completely to a division, or to the enterprise as a whole via the profit center "Corporate and Others" To check the correct assignment of profit centers, you will carry out the following activities at the end of the period: check that no dummy profit centers have been posted and that the profit center "Corporate and Others" contains only postings that cannot be allocated directly. (C) SAP AG AC665 5-18 Profit Center: Additional Balance Sheet Accounts Balance Sheet Acc. Transaction Additional Profit Center Balance sheet PC Bank/Cash on hand Receivables Inventory No X X No X X Investments Fixed assets No X X X Payables Long-term payables Tax Equity X No No No X X No X SAP AG 1999 For the purpose of comparing financial statement values with profit center values, or for subsequent performance key figure reports, you can carry balance sheet values in particular transaction profit centers. When you do this, you decide which accounts should be carried for which evaluations in a profit center. For example, it is not appropriate to carry investment values on this level, since decisions concerning an investment are not made on the level of a transaction profit center. Depending on a subsequent evaluation using key figure reports, you can decide which financial statement values you want to carry on the balance sheet profit center. This profit center includes values that do not influence the transaction result of the profit center, but which should allow an overview of the area. In EC-PCA, you can define which accounts or account ranges should be transferred on the basis of transactions. If no profit center is set in a posting, the default profit center of the account range is assigned. If you find that the determination of a profit center is not differentiated enough, you can also maintain derivation rules that can be used to determine the default profit center. (C) SAP AG AC665 5-19 EC-PCA Preparing Data: Unit Summary This unit has introduced you to the following topics: Important characteristics of EC-PCA Data stream in Profit Center Accounting The role of the partner profit center SAP AG 1999 (C) SAP AG AC665 5-20 Integrated Data Transfer: EC-PCA Exercises Unit: Integrated Data Transfer: EC-PCA Topic: Profit Center Accounting At the conclusion of these exercises, you will be able to: Describe the tasks in Profit Center Accounting Describe the interrelationships between Profit Center Accounting, Financial Accounting, and Consolidation In the following exercise, you will prepare data in EC-PCA for transfer to Consolidation. 1-1 Display a profit center in controlling area 'C001'. Use the list of possible entries (F4) and select a profit center with F2. 1-1.1 Which standard hierarchy do the profit centers belong to? 1-1.2 What is the function of the dummy profit center C-Dummy in controlling area 'C001'? 1-1.3 Which cost centers are assigned to the profit center? 1-1.4 Why does consolidation require that a profit center be assigned to the company codes in which it was posted in the transaction system? _____________________________________________________________ (C) SAP AG AC665 5-21 1-2 Which profit center did you post when you posted incoming/outgoing invoices? To display the FI documents as a list, choose: Fiscal year and Own documents 1-3 Which documents were updated to Profit Center Accounting? 1-4 Theoretical Question: Which step is required to transfer receivables and payables to Profit Center Accounting? _____________________________________________________________ Your instructor will transfer the balance sheet items to Profit Center Accounting. (C) SAP AG AC665 5-22 Integrated Data Transfer-Solutions Unit: Integrated Data Transfer: EC-PCA Topic: Profit Center Accounting 1-1 Display a profit center in controlling area 'C001'. SAP Menu Accounting Enterprise Controlling Profit Center Accounting Master Data Single Editing Profit Center Display Use the list of possible entries (F4) to display a list of profit centers. Sselect a profit center with F2. 1-1.1 Which standard hierarchy do the profit centers belong to? SAP Menu Accounting Enterprise Controlling Profit Center Accounting Master Data Display Standard Hierarchy The profit centers belong to hierarchy 'C-Top-1'. 1-1.2 What is the function of the dummy profit center C-Dummy in controlling area 'C001'? The dummy profit center 'C-Dummy' is used in any data transfer in which the object (for example, cost center, order...) originally assigned to an account has not been assigned to a profit center. This ensures that the data in Profit Center Accounting is complete. The data in the dummy profit center can be forwarded to the actual profit center by means of assessment or distribution. Forwarding must be carried out before consolidation. 1-1.3 Which cost centers are assigned to the profit center? SAP Menu Accounting Enterprise Controlling Profit Center Accounting Master Data Assignment Monitor Cost centers Cost centers to profit centers (C) SAP AG AC665 5-23 1-1.4 Why does consolidation require that a profit center be assigned to the company codes in which it was posted in the transaction system? This assignment enables you to control which consolidation units are calculated on the basis of the combination profit center/company code. (This prevents all profit centers from being multiplied by all the companies while generating the consolidation units.) 1-2 Which profit center did you post when you posted incoming/outgoing invoices? To display the FI documents as a list, choose: Fiscal year and Own documents SAP Menu Accounting Financial accounting General ledger Document Display Choose the "List" button. 1-3 Which documents were updated to Profit Center Accounting? SAP Menu Accounting Enterprise controlling Profit center accounting Information system Reports for Profit Center Accounting Line Item Reports Profit Center: Actual Line Items (C) SAP AG AC665 5-24 1-4 Theoretical Question: Which step is required to transfer receivables and payables to Profit Center Accounting? 1. Readjust Profit Center: This step is only necessary if you have built up a separate ledger for profit center data. If you use the SAP standard ledger "8A", this step is not required. SAP Menu Accounting Financial accounting General ledger Periodic processing Closing Regroup Balance sheet readjustment 2.Transfer Balance Sheet Item Values to Profit Center: SAP Menu Accounting Enterprise controlling Profit center accounting Actual postings Period closing Payables/receivables Selection parameters: All company codes Line items Degree of detail in log Your instructor will transfer the balance sheet items to Profit Center Accounting. (C) SAP AG AC665 5-25 Data Transfer Methods: EC-PCA Contents EC-CS Data Data Transfer Rollup SAP AG 1999 (C) SAP AG AC665 6-1 Data Transfer Methods: EC-PCA Unit Objectives At the conclusion of this unit, you will be able to: Prepare data transfer for management consolidation Check the transferred data in the receiver system SAP AG 1999 (C) SAP AG AC665 6-2 Course Overview Diagram EIS BP Executive Business Information Planning System EC-CS Consolidation Dimension FI Data PCA Data EC-PCA Profit Center Accounting FI-GL General Ledger SAP AG 1999 (C) SAP AG AC665 6-3 CO Controlling Data Transfer Methods: EC-PCA Business Scenario The company puts you in charge of preparing profit center consolidation. After you have made the necessary assignments in the sender systems, you check the settings in the receiver system. You decide which consolidation units you are going to generate. You have to set up and carry out the data transfer using the rollup method. You can now check the data that is transferred. SAP AG 1999 (C) SAP AG AC665 6-4 The data for profit center consolidation is received via the rollup data transfer method. To use this method, you have to define the consolidation units and areas automatically. The chosen consolidation type determines which organizational elements are proposed. If you wish, you can limit the selection of organizational elements. You can define a data transfer method for every dimension. You can define several hierarchies with various structures for each dimension. In the above example, one hierarchy is displayed in a dimension. To do this, you create a top node and the consolidation groups of the internal trading company. When you have done this, you decide whether you wish to generate the consolidation groups according to profit centers or companies, for example. The profit centers themselves are also consolidation groups. The consolidation units are formed on the basis of the combination of profit center and company. (C) SAP AG AC665 6-5 Converting Organizational Units ECCS FI Transaction System Specify Data Transfer Method: Rollup Receiver System Consolidation Unit Profit Center C6112 Company Code C100 Company C10000 Profit Center Consolidation Profit Center/Company Consolidation Chart of Accounts## C6112-C10000 Version ### ID combination !!! SAP AG 1999 The transaction systems do not recognize the organizational units of EC-CS. This means that the transaction organizational units have to be converted to the consolidation units and groups of EC-CS. In the example, you want to transfer the data from the transaction organizational unit Profit Center C6112 to the appropriate consolidation unit during the data transfer. To do this, you store rules for ID combination for the consolidation type "Profit center consolidation". These rules are used to convert the transaction organizational units to the consolidation units. You define the rules that you want the system to use to derive the IDs and names of the consolidation units and groups from the IDs of the organizational units in G/L accounting and profit center accounting. If necessary, you can include the controlling area in the rules for ID combination if there are several controlling areas, and identical profit centers. (C) SAP AG AC665 6-6 Organizational Units: Rules for ID Combination Consolidation Unit AS PCM C6111 C6112 C6112-C10000 PCM Rules for ID Combination CS Org. Unit Grouping Category 1 0 2 FS item Org. Unit Prefix Length 1 4 2 1 1 1 1 6 3 1 5 18 10 - 6 1 Company C10000 C20000 C30000 Consolidation Group IDES Palo Alto IDES New York IDES Chicago 4 Profit Center C6111 C6112 AS PCM SAP AG 1999 For each relevant data stream, the system determines the rules for ID combination to combine the consolidation type and dimension, and converts the organizational units to consolidation units/groups. CS organizational unit 1 Consolidation unit, 2 Consolidation group Grouping category 0 No grouping 1 Grouping according to company 3 Grouping according to profit center FS item The "ID" of the consolidation unit (here, the profit center) is in the first or second place. Organizational unit 1 Company 3 Controlling area 4 Profit center 5 Profit center/Profit center group The prefix '-' connects the "ID" with the organizational unit. The length of the ID for the consolidation unit / of the consolidation group is, for example, 10 characters (+ prefix) (C) SAP AG AC665 6-7 In the case of the consolidation type "Profit center consolidation", the system generates the consolidation units by combining profit centers and companies according to the rules for ID combination. The system also supports two ways of generating hierarchies: Consolidation hierarchy according to the profit center hierarchy Consolidation hierarchy according to companies The hierarchy according to companies enables you to compare the consolidation results on the basis of the data from external and internal accounting. You first have to manually create each hierarchy node, as well as the overall consolidation group. The generated hierarchies can be postprocessed. You can then generate lists to analyze the organizational units from different perspectives: Transferred consolidation units Master data of the consolidation units that play an important role in integration Transaction system and client that the unit was transferred from (C) SAP AG AC665 6-8 EC-PCA: Transferring FS Items / Data Transferring FS Items: Assign charts of accounts to the consolidation charts of accounts Transfer FS items from cost elements Assign cost element ranges to the FS items Match FS items with cost elements Analyze cost elements according to cost element category Transferring Data: Contra item/Retained earnings: Define task SAP AG 1999 You can use programs to generate consolidation charts of accounts from the charts of accounts. You can also transfer (1:1) secondary cost elements as financial statement items. If you wish to bundle cost elements, assign the cost element range to the financial statement items in the consolidated chart of accounts. You can check the assignment of accounts and financial statement figures by using reports for analysis and reconciliation. You can generate the group chart of accounts from a consolidation chart of accounts. It is not necessary to create either the chart of accounts or the account group in advance. The system creates these automatically. To transfer the data, assign the group chart of accounts in the sender system to the consolidation chart of accounts in the EC-CS receiver system. When doing this, you can determine whether you wish to assign ranges of the secondary cost elements to financial statement items. If you have not already done so, you have to define a task for calculating the contra item and the retained earnings during the data transfer. (C) SAP AG AC665 6-9 Transfer Data: Defining Data Streams ECCS Group: Consolidation System EC-CS FI-LC RF-KONS Fiscal Year Variant: Active Consolidation Types Company Cons Business Area Cons Profit Center Cons SAP AG 1999 For each combination of consolidation type and dimension, you define the consolidation chart of accounts and version to which you want the data to be transferred. For each relevant data stream and dimension, the system determines the consolidation type, and uses this to define the rules for ID combination. (C) SAP AG AC665 6-10 You can use rollups to display the information contained in one or more source ledger(s) in a summarized form. The rollup contains a definition which is used to specify how the data is totaled in a target ledger. At present, the rollup is the only way of transferring data for profit center consolidation. SAP supplies the following standard rollups for this purpose: Rollup 0C_PC2CS (sender table GLPCT - receiver table ECMCT) Rollup 0C_CS2CS (sender and receiver table ECMCT) This rollup is only required for data transfer between different R/3 Systems. To transfer data to consolidation, call up the standard rollup from the data monitor screen. (C) SAP AG AC665 6-11 The rollup consists of a rollup header and one or more rollup sequence(s). The header level contains the following information: The totals tables from (sender table) and to (receiver table) which the data records are to be rolled up. Here, the standard rollup for PCA data transfer contains the totals table of profit center accounting (GLPCT) as the sender table, and the totals table of consolidation (ECMCT) as the receiver table. Specify the reset set. The reset set has to be adjusted in line with the Customizing settings. Rollup set: the user must adjust this in line with the Customizing settings. User exit: the standard rollup contains the standard exit "SC1", which does not have to be edited by the user. (C) SAP AG AC665 6-12 At the start of the rollup, the value fields in the receiver table that are to be filled by the rollup are set to zero by the reset set. This resetting of the data in the receiver table is carried out before the actual rollup. This means that the rollup can be repeated as often as you want. In data transfer from EC-PCA to EC-CS, the reset set also serves to identify the data stream to which the data records are to be posted. Consequently, the reset set has to specify a unique combination of the key characteristics version (field RVERS), dimension (RDIMEN) and consolidated chart of accounts (RITCLG). It is also necessary to specify the key characteristics ledger (RLDNR) and posting level (field RPLEVL). A rollup allows you to write exactly one data stream. If several data streams are to be written by means of rollup, (for example, transfer of actual data in Version 100 and of planning data in Version 200), then a corresponding number of rollups has to be defined. (C) SAP AG AC665 6-13 Rollup sets are used to determine the maximum data set to be selected for rollup that is valid for all rollup sequences. This data set can subsequently be restricted at the sequence level. For performance reasons, you also have to specify at least the characteristics ledger, record type, version, and company code. The standard rollup also contains an "SC1" exit. In preparations for rollup, this reads the necessary internal EC-CS Customizing tables with regard to the data streams, rules for ID combination, financial statement items, and so on. (C) SAP AG AC665 6-14 When the values in the receiver table are at zero, and the scope of selection for data is specified in the rollup set, the data to be selected is read into a rollup sequence one record at a time. If you wish to transfer the data to exactly one consolidation ledger, you also have to define only one rollup sequence. When defining the rollup sequence, specify the field movement and the receiver ledger. The field movement specifies how each receiver field is filled. (C) SAP AG AC665 6-15 There is no corresponding field in the sender table for the consolidation-specific fields in the receiver table ECMCT. This means that they cannot be filled by means of direct transfer of field contents from the sender table. The standard rollup already contains standard exits for these fields, which obtain the required field contents from the appropriate consolidation tables. As a rule, these exits are sufficient for data transfer from EC-PCA to EC-CS. Each selected data record goes through these conversions for the rollup. If further requirements should arise, customer-specific user exits can be defined and assigned. You will find detailed instructions relating to this point in SAP note 111140. (C) SAP AG AC665 6-16 Field Transfer and Standard Exits Example: Field Movement Receiver Field Sender Field Consolidation unit RBUNIT RBUPTR Partner unit RDIMEN Dimension Cons chart of accts RITCLG FS item RITEM ROBUKRS Original company code RBUKRS Company code Record type RRCTY Version RVERS Subitem category SITYP Subitem SUBIT User exit before writing Standard Exit SC6 SC8 SC3 SC4 SC7 SC2 SC5 SC8 SC8 SC1 SAP AG 1999 Field movement is carried out using client-independent standard exits: The exits are processed in alphabetical order. If there is an error in the data record before posting, this is marked as consolidation unit 9999* (the length of the consolidation unit corresponds to the length specified in the rules for ID combination). The values of this record are set at zero. In the rollup header (processing options), you can decide whether you want to write this record. (C) SAP AG AC665 6-17 Rollup in Different Systems a) Central scenario + c) decentr. scenario with ALE AC Docs GLPCT Profit Center Ledger Standard Rollup GLPCT ECMCT ECMCT EC-CS Ledger Export Rollup ECMCT ECMCT c) decentr. Scenario with ALE b) decentr. Scenario w/o ALE Standard Rollup ECMCT ECMCT EC-CS Ledger ECMCT SAP AG 1999 For the purposes of transferring transaction data to the EC-CS consolidation system, certain Customizing settings for consolidation have to be known in the transaction applications in order to convert the data to the required account assignment. It is about Customizing settings concerning Consolidation chart of accounts, FS items, Breakdown categories, Subitem categories, Subitems, Assigning dimensions/ integrated consolidation types, Rules for ID combination global specifications (for example Alpha conversion) When a rollup of the transaction data is generated in the transaction system, the system uses the Customizing settings to convert the data. The file generated by the rollup can then be checked and written to the consolidation system. (C) SAP AG AC665 6-18 Data Transfer Methods: EC-PCA Unit Summary You are now able to: Prepare data transfer for management consolidation Check the transferred data in the receiver system SAP AG 1999 (C) SAP AG AC665 6-19 Exercises Unit: Data Transfer Methods:EC-PCA Topic: Preparing EC-CS Data At the conclusion of these exercises, you will be able to: Maintain the master data of a profit center in relation to the preparations you made for consolidation Analyze the profit center assignments of FI documents Make preparations in the EC-CS consolidation system for a profit center consolidation scenario 1-1 In the global session parameters, set your dimension #3 Profit Center Consolidation. 1-2 Check over the ID combination rules. What must your consolidation units be called? _____________________________________________________________ 1-3 Copy the hierarchy for dimension #3, and display it. To do this, create hierarchies H1 and H2 (to group according to profit centers or companies), and create a top consolidation group for each hierarchy. Place your cursor on the top node of hierarchy H1, and choose Profit Centers. Select the Same R/3 System and Hierarchy of profit centers options. Confirm the entries with 'Enter' and generate the consolidation groups and units without restricting these to particular companies/profit centers. Repeat this procedure in order to generate the consolidation groups and units of your company hierarchy H2. Define fiscal year variant K4 in your consolidation units. Save your entries. You can not generate sets due to technical reasons. _____________________________________________________________ (C) SAP AG AC665 6-20 1-4 Evaluate the master data, and check over the assignment of consolidation units to ledger and fiscal year variant and data transfer method (0 = rollup). Ask the person sitting next to you why the rollup data transfer method could be copied together with the Profit Center Consolidation dimension. _____________________________________________________________ _____________________________________________________________ 1-5 Check the definition of the data streams. (C) SAP AG AC665 6-21 Unit: Data Transfer Methods: EC-PCA Topic: Rollup At the conclusion of these exercises, you will be able to: Describe the functions of a rollup 2-1 Look at the definition of rollup PCA_CS_2 (instructor). Check the rollup header, the reset set, the rollup sequence, and the field transfer set. _____________________________________________________________ _____________________________________________________________ (C) SAP AG AC665 6-22 2-2 Additional Exercise: Define your own rollup PC_CS_## for your course group (## = course group number + 40). Use the instructor's rollup as a copy template: PCA_CS_2. As the template, enter your group’s rollup and the instructor’s rollup. Choose the rollup header. You can use to display and change reset set ECMCT_2. - Overwrite multi-set ECMCT_2 with ECMCT_# (where # is the letter of your dimension). Choose Create Set and enter a description for the set. Enter the following basic sets: - RLDNR_ECMCT_2 - RDIMEN_ECMCT_# (where # is the letter of your dimension) This set contains the dimension of your group. - RVERS_ECMCT_2 - RITCLG_ECMCT_2 - RPLEVL_ECMCT_2 Save your entries, go back one level, and save rollup PC_CS_##. Please do not make any changes in the rollup sequence! _____________________________________________________________ (C) SAP AG AC665 6-23 2-3 Additional Exercise: Executing the task Data Entry In the data monitor (EC-CS application menu), execute the rollup PC_CS_## for period 012 and the current year. _____________________________________________________________ 2-4 Additional Exercise Carry out the remaining tasks in the data monitor as well as the consolidation tasks in the consolidation monitor. _____________________________________________________________ (C) SAP AG AC665 6-24 Data Transfer methods-Solutions Unit: Data Transfer Methods:EC-PCA Topic: Preparing EC-CS Data 1-1 In the global session parameters, set your dimension #3 Profit Center Consolidation. SAP Reference IMG Enterprise Controlling Consolidation Specify Global Parameters 1-2 Check over the ID combination rules. What must your consolidation units be called? SAP Reference IMG Enterprise Controlling Consolidation Integration: Preparation for Consolidation Preparation in the EC-CS Consolidation System Copy Organizational Units Define ID Combination Rules 1-3 Copy the hierarchy for dimension #3, and display it. To do this, create hierarchies H1 and H2 (to group according to profit centers or companies), and create a top consolidation group for each hierarchy. Place your cursor on the top node of hierarchy H1, and choose Profit Centers. Select the Same R/3 System and Hierarchy of profit centers options. Confirm the entries with 'Enter' and generate the consolidation groups and units without restricting these to particular companies/profit centers. Repeat this procedure in order to generate the consolidation groups and units of your company hierarchy H2. Define fiscal year variant K4 in your consolidation units. Save your entries. You can not generate sets due to technical reasons. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Converting Organizational Units Edit hierarchies (C) SAP AG AC665 6-25 1-4 Evaluate the master data, and check over the assignment of consolidation units to ledger and fiscal year variant and data transfer method (0 = rollup). Ask the person sitting next to you why the rollup data transfer method could be copied together with the Profit Center Consolidation dimension. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Converting Organizational Units Evaluate the Master Data of the Organizational Units 1-5 Check the definition of the data streams. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the EC-CS Consolidation System Collection of Data Define Data Streams (C) SAP AG AC665 6-26 Unit: Data Transfer Methods: EC-PCA Topic: Rollup 2-1 Look at the definition of rollup PCA_CS_2 (instructor). Check over the rollup header, the reset set, the rollup sequence, and the field transfer set. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the Sender System Preparation and Activation of Data Transfer Rollups Define Rollup for Data Export Display Rollup Choose Rollup Header. By choosing , you can also display the reset set ECMCT_2. Choose Rollup Sequence. By choosing , you can also display the field transfer set. By choosing , you can also display the field transfer rule CS01. 2-2 Additional Exercise: Define your own rollup PC_CS_## for your course group (## = course group number + 40). Use the instructor's rollup as a copy template: PCA_CS_2. SAP Reference IMG Enterprise Controlling Consolidation Integration. Preparation for Consolidation Preparation in the Sender System Preparation and Activation of Data Transfer Rollups Define Rollup for Data Export Create rollup Choose Rollup Sequence. Do NOT make any changes! By choosing , you can display the field transfer set. By choosing , you can display the field transfer rule CS01. (C) SAP AG AC665 6-27 2-3 Additional Exercise: Executing the task Data Entry In the data monitor (EC-CS application menu), execute the rollup PC_CS_## for period 012 and the current year. SAP Menu Accounting Enterprise Controlling Consolidation Choose Data Monitor. Expand the top consolidation group, and place your cursor on Data Entry. Choose Update Run and Reported Data Consolidation Units. Execute the rollup PC_CS_##. Confirm the messages with Enter. What you enter: Period: 012 Year: the current year Choose Detail List. Start the rollup. 2-4 Additional Exercise: Carry out the consolidation steps in the Data monitor and in the Consolidation monitor. SAP Menu Accounting Enterprise Controlling Consolidation Choose Data Monitor. Block the task Standardizing Entries for the top consolidation group. Open the hierarchy. Start the task Retained Earnings/Contra Item for the top consolidation group (in update mode) and block the task. You use the same procedure for the task Validate Standardized Data. Choose the Consolidation monitor. Open the hierarchy. Place your cursor on the top consolidation group. Start the task Elimination of IU Payables/Receivables for the top consolidation group (in update mode) and block the task. You use the same procedure for the task Elimination of IU Revenue/Expense. (C) SAP AG AC665 6-28 (C) SAP AG AC665 6-29 Key Figures Contents Key Figure Reporting: EC-CS Financial/Management Accounting: Reconciliation Key Figures in EC-EIS SAP AG 1999 (C) SAP AG AC665 7-1 Key Figures: Topic Objectives At the conclusion of this unit, you will be able to: Name various key figure reports for consolidated profit center data Reconcile FI data with profit center data Assess the predictive values of different reports for various levels of the enterprise SAP AG 1999 (C) SAP AG AC665 7-2 Course Overview Diagram EIS BP Executive Business Information Planning System EC-CS Consolidation Dimension FI Data EC-PCA Profit Center Accounting FI-GL General Ledger SAP AG 1999 (C) SAP AG AC665 7-3 CO Controlling Key Figures: Business Scenario You are to carry out consolidation at the profit center data level. Then you want to use key figures to evaluate the data in profit center consolidation. SAP AG 1999 (C) SAP AG AC665 7-4 EC-CS Reporting ECECEIS BP EC-CS EC -PCA EC-PCA FI & CO Balance Sheets Income Statement Total Cash Flow ROCE Return on Capital Employed ROA Return on Operating Assets Reconciliation FI: PCA Organizational Units: Consolidation Group, Company, Strategic Business Unit, Division, Profit Center, Consolidation Unit Company/Profit Center SAP AG 1999 Performance key figures are used by management to specify enterprise goals, such as raising the return on investment of the operational assets by 10% while simultaneously lowering operational expenses by 5%. In order to optimally plan resources for the individual areas, the responsible managers specify these goals in terms of sub-goals. Achieving these specifications is often also decisive in determining the salary of the area manager. The performance key figures are also used to carry out comparisons within the industry, or to evaluate the marketability of an enterprise. Examples of performance key figures: ROCE (Return On Capital Employed): Return on assets ROCE = NOPAT / Capital employed: Return on capital employed = annual net income before interest on borrowings, after tax / total equity ROA = NOPAT / Operating Assets: Annual net income before interest on borrowings, after tax / operational transferred and current assets, and payables (C) SAP AG AC665 7-5 Reporting Balance Sheets Income Statement Cash Flow Key Figures for Return on Investment and Liquidity Economic Profit / EVA® Discounted Cash Flow CFROI Cash Flow Return on Investment SAP AG 1999 In addition to the standard FI reports, you can create further reports in the R/3 System, and insert them into the report tree. Cash flow: This key figure uses the cash inflow from sales to calculate the internal financing resources of an enterprise. In simplified form, an enterprise's profitability/ability to pay is calculated on the basis of the following values: annual net income + depreciation + increase in the long-term provisions Cash flow does not provide a clear conclusion on the profitability of the enterprise. Consequently, other key figures for return on investment (ROI, ROCE) and liquidity (working capital, liquidity 1st/2nd/3rd degree) are generated along with the cash flow key figure. In addition to the profit-based key figures, cash flow-based key figures are now being increasingly used. For example: Discounted Cash Flow is a planning tool, that calculates the discounted cash flow for a specific planning period. This plan figure determines the current potential of the enterprise. CFROI: The CF Return on Investment key figure permits comparisons between the return on investment in the various business areas of an enterprise. EVA (Economic Value Added): This key figure determines the value achieved after all capital investments have been deducted. (C) SAP AG AC665 7-6 Technique for Cash Flow Reports Cash Flow Report Strategic Business Unit PHARMA Hidden Columns Fiscal Year 1999 GE 6000 Annual Net Income 588915 Depreciation 456750 Appropriations to Provisions 517435 Delta Long-Term Payables 275050 Delta Raw Material 301001312613 1092657CF from Business Transactions 557046 Acquisitions Investments Acquisitions Assets CF from Investing Activities Delta Long-Term Payables CF from Financing Activity Change in Net Liquidity 53580090370014395001013000 1013000 1999 1998 Delta 152250 436665 588915 456750 456750 27091102191675517435450000 725050 27505030100 164635 194735 Delta WIP 2316371544250 231637-Delta Finished Products 1284927 192270 10926573572000 9105726 3036200 8202026 535800903700- 4062350- 3049350- 1013000- 130546 The cell calculation is based on rows, columns, cells and +/- signs. SAP AG 1999 This report shows a possible display format for the total cash flow. You can create a cash flow report at the business area level if you ensure that the relevant data is handled at the business area level. In the hidden columns, the drilldown report determines the totals per year, calculates the deviations, and puts them into the visible Cash Flow column for the business unit PHARMA. (C) SAP AG AC665 7-7 Performance Key Figures in the Model Group CF Total Cash Flow ROCE Return on Capital Employed EBITDA Earnings before Interest ... Group Group Strategic Business Unit Chemicals Pharma Diabetic Division and others: Sales, Profit ... Analgesic ROA Return on Operating Assets EBITDA Earnings before Interest Mono Product Line AS Product PCM Combo CF Transaction Cash Flow and others: Sales, OPEX (Operating Expense) SAP AG 1999 Examples of key figures: ROCE (Return on Capital Employed) EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) = Sales - COGS - operating costs (excl. Depreciation / Amortization) ROA: operating profit /operating assets In the IDES model enterprise, the performance of operational profit centers should be calculated using only key figures with influencing factors that can be completely controlled by the person responsible for the profit center. Example: A profit center manager is not responsible for the investments carried out on the strategic business unit level. It is, therefore, expedient to calculate a key figure for return on capital employed on the strategic business unit or group level. (C) SAP AG AC665 7-8 Performance Key Figures I Performance Key Figures at the Levels Consolidated Group, Segment, Strategic Business Unit: Total Cash Flow Return On Capital Employed ROCE = NOPAT Total Equity NOPAT Total Equity = Net Operating Profit After Tax = Stockholders' Equity + Outside Capital EBITDA Earnings Before Interest,Tax, Depreciation and Amortization SAP AG 1999 ROCE (Return on Capital Employed) = annual net income before interest on borrowings, after tax / total equity You can use this key figure to carry out comparisons in the industry. NOPAT = annual net income before interest on borrowings, after tax EBITDA = sales less COGS less operating costs (excluding depreciation / amortization) COGS = costs of goods sold (C) SAP AG AC665 7-9 Performance Key Figures II Performance Key Figures at the Levels Division to Profit Center Operational Expenses Ordinary Operating Profit Cash Flow from Business Transactions (Excluding Investing/ Financing Activities) Return on Operating Assets ROA = Ordinary Operating Profit Operational Fixed/Current Assets SAP AG 1999 Operational Fixed/Current Assets consist of: fixed assets + inventories + receivables. The payables are included so that the inventory changes at the division/profit center level are not given undue weight. (C) SAP AG AC665 7-10 Key Figures in the Consolidated Chart of Accounts Cons Chart of Accounts Balance Sheets Hints on Key Figures: Rule: unique hierarchy with totals items Income Statement Use of further FS item hierarchies for alternative totalings Statistical Values Example: Totals item EBITDA Key Figures EBITDA Sales Revenue Costs of Goods Sold Operational Costs Excluding Depreciation SAP AG 1999 EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) = Sales less COGS less operating costs (excl. Depreciation / Amortization) The items of the consolidation chart of accounts require unique hierarchies for the totals items. The key figure EBITDA uses the same value items as in the income statement hierarchy, but with different totals items. This means that it is possible to create a parallel hierarchy node in addition to the normal totals items. The EBITDA totals node comprises the calculation of the following values: Sales, Cost of goods sold, and Operational expenses do not include depreciation/amortization of tangible fixed assets and financial assets. Advantage: You can use this key figure in all drilldown reports. If the calculation of the key figure changes, you change it in the consolidation chart of accounts (the data is not redundant). (C) SAP AG AC665 7-11 Reconciliation of FI and PCA Results in EC-CS Execute Compare FI & PCA Dimension data (B/S): Detail List Compare FI & PCA Dimension data (B/S) Current data 7/19/1998 18:42 Reconciliation of Dimension 02 “FI Integration” with 03 “PCA Integration” Business Unit 6000 PHARMA FI Dim Current Assets Cash Non-Cash Fixed Assets Total Assets Tot. Assets w/o Cash Short-term Liab. Tax Non-Tax Long-Term Liab. B/S BA clearing Equity EQ w/o Net Income Net Income CY Liability & Equity L & E w/o Tax & Clear 5.272.257 0 5.272.257 9.632.726 14.904.983 14.904.983 PCA Dim Op. PrCtr 5.272.258 0 5.272.258 9.632.726 4.816.313 0 4.816.313 2.576.283 455.945 0 455.945 7.056.443 7.392.596 7.392.596 7.512.388 7.512.388 14.904.984 14.904.984 B/S PrCtr 6.782.470406.0006.376.4704.062.350356.754 4.416.917569.8500 6.376.4700 6.376.4704.062.35049.2474.416.917569.8500 2.177.6500 2.177.6500 3.450.0971.764.8490 0 4.198.8200 4.198.8204.062.3503.400.850 2.652.068569.8500 14.904.98314.855.737- 14.904.98414.855.737- 7.392.5963.942.499- 7.512.38810.913.238- SAP AG 1999 In this prepared balance sheet, you can compare the results of the profit center with those of external accounting. In order to do this, you must have transferred the necessary balance sheet items to the profit centers. In EC-CS, you can handle the consolidated values of the business area in various dimensions. On this level, the following reports are possible: Balance sheets Cash flow report Return on capital employed You can create the following reports for the profit center consolidation dimension : Asset portfolio Income statement by divisions Return on Operating Assets Cash flow from operating activities You can use drilldown reports to compare the values from both dimensions. If the business units are to be reconcilable, the balance sheet values that were handled at the profit centers are essential, and account assignment objects must be assigned completely to profit centers. (C) SAP AG AC665 7-12 Key Figure ROA - Report in EC-CS Divisions and Product lines in Business Unit PHARMA Execute DIM 03 Return on operating Assets ROA: Detail DIM 03 Return on operating Assets ROA Fiscal Year 1999 Analgetics Current data 19.07.1998 18:42 Mono Combo Diabetics Sales - Net Cost of Goods Sold Selling & Admin Exp. Research & Develop. Operating Profit 5.200.000 4.629.736 4.000 4.800 561.464 4.000.000 3.561.335 2.000 3.000 433.665 1.200.000 1.068.401 2.000 1.000 128.599 6.781.600 5.496.865 303.150 27.265 954.320 Fixed assets Inventory A/R A/P Operating Assets 1.183.650 1.311.814 585.000 986.300 2.094.163 910.499 1.013.000 450.000 755.000 1.618.499 273.151 296.314 135.000 228.000 476.464 3.340.077 1.838.594 833.851 1.050.610 4.961.911 27 27 19 Return on Operating Assets ROA % 27 SAP AG 1999 ROA = NOPAT / Operating Assets: Net operating profit after tax / operating fixed and current assets and payables (C) SAP AG AC665 7-13 Performance Key Figures: Trends Profit-Based Key Figures versus Cash Flow-Based Key Figures EVA® Economic Value Added DCF CFROI Discounted Cash Flow Cash Flow Return On Investment SAP AG 1999 EVA (Economic Value Added): This key figure determines the value achieved after all capital investments have been deducted. It permits good prognoses for the future, since the influencing factors are profit-based and not cash flowbased (in other words, oriented to the sales of of the particular business unit). The cash flow-based key figures provide a more realistic representation of profits and provide a reliable criterion for evaluating managers' remuneration packages. "Discounted Cash Flow" calculates the discounted cash flow for a specific planning period and determines the current potential of the enterprise. CFROI: The CF Return on Investment key figure permits comparisons between the return on investment in the various business areas of an enterprise. (C) SAP AG AC665 7-14 EVA®: Influencing Factors EVA® NOPAT - (WACC x Capital) WACC NOPAT Capital Weighted Average Cost of Capital + Cost of Equity II Cost of Debt II x x Cost of Equity I Equity / Capital Ratio + Cost of Debt I Debt / Capital Ratio x Company Risk Premium Interest rate 1 - Tax rate x Market Risk Premium Beta factor – Interest rate risk free investment Average Market Return SAP AG 1999 The calculation of EVA is made up of several components: NOPAT (Net Operating Profit After Tax), a profit-based key figure CAPITAL: total assets - current assets WACC (Weighted Average Cost of Capital), the average costs of all long-term funds. (The costs of stockholders' equity are the opportunity costs for the investors, since they have not invested their equity in another enterprise with a similar risk.) WACC is the key figure that is calculated from the enterprise figures enterprise-wide, and can be freely combined with the influencing factors of other segments. This means that you can work with the EVA key figure even at the lowest level of the enterprise structure, which allows you to maintain optimum warehouse stock, for example. Data from banks, financial institutions, or industry-related data influence the costs of stockholders' equity, and thus permit an objective assessment of the enterprise. (C) SAP AG AC665 7-15 Management Reporting (Key Performance Indicators Monetary and Non-Monetary) EC-EIS EC-CS external internal Calculation of Profits for the "Enterprises in the Enterprise" ont Tra App nsacti lica on tion s PC -C EC-PCA FI Financial Consolidation Internal and External (Balance Sheets) Validation roll in g G rou pA External Performance Indicators (for example, Market Shares, Customer Satisfaction, and so on) cco Internal Non-Monetary Performance Indicators unt i ng I Ba n Con d Gro trol up ling Task Distribution: Controlling / Group Accounting CO Non-SAP Transaction Systems SAP AG 1999 The results are determined automatically in the operational units. In EC-CS, internal transactions are eliminated, which allows the values for the individual business units to be displayed in a consistent form. The various report categories permit you to reconcile the values between business areas and profit centers. In EC-EIS, the results are presented to the management and analyzed. Real-time information with a very high level of detail flows into this component from every company area. By selecting, assigning, and summarizing the data from the operational area, you can create a key figure system tailored to your specific enterprise. The integration of the transaction levels with the management information level provides consistent bases for decision making. Each responsible person optimizes his or her enterprise area in accordance with the strategy of the group as a whole. (C) SAP AG AC665 7-16 EVA® with SAP EC-EIS and inSight Economic Profit using Capital Charge Formular Navigation Year Fiscal Year ´99 Economic Profit 854.585 US$ Consolidation Group Pharma Consolidation Level Level 2 Pharma (Auto) Economic Profit 854.585 US$ Economic Profit 854.585 US$ NOPAT - WACC * Capital Start Economic Profit 854.585 US$ Exit System SAP AG 1999 Data collection reports can be used to transfer data from EC-CS and EC-PCA to the EIS database. Advantages of reporting with EC-EIS: The EIS database is not account oriented. EIS has transactions for calculating key figures that are independent of reports in the system. The inSight GUI manufactured by the Arcplan company enables you to portray the key figures from the EIS database graphically. (C) SAP AG AC665 7-17 EVA®: Weighted Average Cost of Capital Economic Profit using Capital Charge Formular Navigation Year Risk free Investment 6,1 % Cost of Equity 10,0 % Market Risk Premium 4,5 % Fiscal Year ´99 Consolidation Group Av. Av. Market return 10,6 % Pharma Consolidation Level WAC Equity 8,6 % Company Risk Premium 4,0 % WAC 9,1 % Level 2 Pharma (Auto) Beta factor 0,89 Tree_1_A Tree_1_A Debt 219.351 US$ WACC Dept + WACC Equity Gearing 15,0 % Mark. capitalisation 8.500.000 US$ Number of shares 100.000 Share price 85 US$ WACC Debt 854.585 US$ Cost of Debt 3,3 % Interest rate loans 6,6 % Tax rate 50,0 % SAP AG 1999 (C) SAP AG AC665 7-18 Back Key Figures: Unit Summary You are now able to: Name various key figure reports for consolidated profit center data Reconcile FI data with profit center data Assess the predictive values of different reports for various levels of the enterprise SAP AG 1999 (C) SAP AG AC665 7-19 Key figures-Exercises Unit: Key Figures At the conclusion of these exercises, you will be able to: Describe the various reporting levels available for individual key figure reports Name the reports for reconciling data in FI and EC-PCA You are to evaluate consolidated data at various levels as a sound basis for decision-making. You have to ensure that the consolidated data from FI and EC-PCA is consistent. 1-1 Additional Exercise: Execute some key figure reports. Your instructor will tell you the reports that you have to call up. (C) SAP AG AC665 7-20 Key Figures-Solutions Unit: Key Figures 1-1 Additional Exercise: Execute some key figure reports. Your instructor will tell you the reports that you have to call up. SAP Menu Accounting Enterprise Controlling Consolidation Information System Tools Drilldown Reporting Use F4 to display the list of possible entries, and choose a report. (C) SAP AG AC665 7-21 Appendix Contents Logistics integration between EC-CS and EC-PCA Consolidation chart of accounts SAP AG 1999 (C) SAP AG AC665 8-1 Example: LO Integration with FI and EC-PCA SAP AG 1999 (C) SAP AG AC665 8-2 Example: LO Integration with FI and EC-PCA Customer Supplier Company Code C100 PrCtr C6111 Company Code C300 PrCtr C4311 Purchase Order Delivery Picking Goods Receipt Incoming Invoice Goods Issue Customer Invoice SAP AG 1999 The customer creates the purchase order with company code C100 and profit center C6111. The posting year is 1999. The supplier creates the delivery with company code C300 and profit center C4311. Goods issue is carried out after picking. When goods issue and invoicing is carried out, the system uses the purchase order to determine the trading partner and the partner profit center. When the incoming invoice and goods receipt are created, the system uses the delivery to determine the partner relationship. This means that the document contains the sales item with the customer code C100, profit center C6111, and the information on the partner units: Company C30000/ Profit Center C4311. (C) SAP AG AC665 8-3 Purchase Order Purchase Order ME23 Doc 4.500.000.002 Scenario No FI document is generated! Company code C100 Palo Alto makes a purchase order for the material C-SA1 Acetyl Substance (material master MM03) for the production of ASPARAX. The supplier is C100VEND3; the supplying plant is C300 Chicago. The production order directly generates an SD worklist - no sales order is required. Sender Partner Unit BUKRS C100 Palo Alto GSBER 6000 Pharma PRCTR C6111 ASPARAX Production SAP AG 1999 (C) SAP AG AC665 8-4 Delivery and Picking Delivery & Picking No FI document is generated! VL03 Doc 80.000.000 Scenario Company code C300 Chicago has received the purchase order for the material C-SA1 Acetyl Substance from the trading partner customer C300CUST2 (company code C100 Palo Alto). Documents for delivery and picking are generated on the basis of the SD worklist (generated by the purchase order). Sender Partner Unit BUKRS C300 Chicago GSBER 4000 Chemicals PRCTR C4311 Acetyl Substance SAP AG 1999 (C) SAP AG AC665 8-5 Goods Issue Goods Issue MB51 Doc 49.002.289 Scenario: Plant C300 Chicago delivers to the customer of the trading partner. Material: C-SA1 FI Posting: Debit Cost of Goods Manufactured for Sales Credit Raw Materials The partner PrCtr is derived from the purchase order (in non-distributed scenarios). Sender Partner Unit BUKRS C300 Chicago C10000 Company Palo Alto GSBER 4000 Chemicals 6000 Pharma PRCTR C4311 Acetyl Substance C6111 ASPARAX SAP AG 1999 (C) SAP AG AC665 8-6 Goods Receipt Goods Receipt MB03 Doc 50.002.940 Scenario: Company code C100 Palo Alto receives the ordered goods from the trading partner's suppliers. FI Document Debit Raw Materials Credit Goods Receipt/Invoice Receipt Clearing Account The partner profit center is derived from the delivery. Sender Partner Unit BUKRS C100 Palo Alto C30000 Chicago GSBER 4000 Chemicals 6000 Pharma PRCTR C4311 Acetyl Substance C6111 ASPARAX SAP AG 1999 (C) SAP AG AC665 8-7 Invoicing Invoicing VF03 Doc 90.000.000 Scenario: Company code C300 Chicago sends the invoice to the customer. FI Document: Debit Customer C300CUST2 (A/R) Credit Sales Revenue and Tax The partner profit center is derived from the purchase order (in non-distributed scenarios). Sender Partner Unit BUKRS C300 Chicago C10000 Palo Alto GSBER 4000 Chemicals 6000 Pharma PRCTR C4311 Acetyl Substance C6111 ASPARAX SAP AG 1999 (C) SAP AG AC665 8-8 Incoming Invoice Incoming Invoice MR03 Doc 5.100.000.000 Scenario: Company code C100 Palo Alto receives the invoice from the affliliated company's supplier (posting year 1999). FI Document Debit GR/IR clearing account and account for price differences Credit Supplier C100VEND3 (A/P) The partner profit center is derived from the delivery. Sender Trading Partner BUKRS C100 Palo Alto C30000 Chicago GSBER 4000 Chemicals 6000 Pharma PRCTR C4311 Acetyl Substance C6111 ASPARAX SAP AG 1999 (C) SAP AG AC665 8-9 Cons Chart Dimension Item Cons Chart Medium Text for FS items 1 US, ARE Version Balance Sheet, COGS Period IT S WA 100000 ASSETS 2+ A 100100 Total Current Assets 2+ A 110000 Cash and Cash Equivalents 2+ A 110100 Cash 1+ A 110200 Marketable Securities 1+ A 119000 Net Receivables 2+ A 120000 Accounts Receivable - Net 2+ A 120100 Trade Receivables 1+ A 120200 Allowance for Doubtful Accounts 1- A 125000 Other Receivables 2+ A 125100 Notes Receivable 1+ A 125200 Interest Receivable 1+ A 125300 Miscellaneous Receivables 1+ A 130000 Intercompany Receivables 2+ A 130100 IC Trade Receivables 1+ A 130200 IC Notes Receivable 1+ A 130300 IC Interest Receivable 1+ A 130500 IC Due to/from 1+ A 131000 IC Elimination of Payables and Receivables 1+ A 135000 Inventories 2+ A 135100 Raw Materials 1+ A 135200 Work in Process 1+ A 135300 Finished Goods Inventory - Purchased 1+ A 135400 Finished Goods Inventory - Production 1+ A 140000 Other Current Assets 2+ A 140100 Prepaid Insurance 1+ A (C) SAP AG AC665 8-10 140200 Other Current Assets 1+ A 150000 Deferred Tax Assets 2+ A 150100 Deferred Tax Assets 1+ A 150200 Deferred Tax Assets - Valuation Allowance 1+ A 160000 Total Fixed Assets 2+ A 170000 Investments 2+ A 170100 Investments in Subsidiaries - Purchase 1+ A 170200 Investments in Subsidiaries - Proportional 1+ A 170300 Investments in Subsidiaries - Equity 1+ A 170400 Investments in Parent Company's Common Stock 1+ A 180000 Goodwill - Net 2+ A 181000 Goodwill 2+ A 181100 Goodwill - Purchase 1+ A 181200 Goodwill - Proportional 1+ A 181300 Goodwill - Equity 1+ A 181400 Goodwill - Push Down Method 1+ A 185000 Accum. Goodwill Amortization 2- A 185100 Accum. Goodwill Amortization - Purchase 1- A 185200 Accum. Goodwill Amortization - Proportional 1- A 185300 Accum. Goodwill Amortization - Equity 1- A 185400 Accum. Goodwill Amortization - Push Down Method 1- A 190000 Property, Plant and Equipment, net 2+ A 191000 Property, Plant and Equipment 2+ A 191100 Land and Real Estate 1+ A 191200 Buildings 1+ A 191300 Furniture and Fixtures 1+ A 191400 Transportation Equipment 1+ A 191500 Machinery and Equipment 1+ A 195000 Accumulated Depreciation 2- A 195200 Accumulated Depreciation Buildings 1- A 195300 Accumulated Depreciation - Furniture and Fixtures 1- A 195400 Accumulated Depreciation Transportation Equip. 1- A (C) SAP AG AC665 8-11 195500 Accumulated Depreciation - Mach. & Equipment 1- A 200000 Total Liabilities and Stockholders Equity 2- B 200100 Total Liabilities 2- B 200200 Total Current Liabilities 2- B 201000 Trade Payables 2- B 201100 Trade Payables 1- B 201200 Miscellaneous Trade Payables 1- B 205000 Other Payables 2- B 205100 Notes Payable - Current Portion 1- B 205200 Bonds Payable - Current Portion 1- B 205300 Accrued Interest Payable 1- B 205400 Accrued Wages Payable 1- B 205500 Accrued Payroll Taxes Payable 1- B 205600 Dividends Payable 1- B 205700 Miscellaneous Payables 1- B 210000 Payables to Affiliated Companies 2- B 210100 IC Trade Payables 1- B 210200 IC Notes Payable 1- B 210300 IC Interest Payable 1- B 210400 IC Dividends Payable 1- B 215000 Income Taxes Payable 2- B 215100 Income Taxes Payable - Federal 1- B 215200 Income Taxes Payable - State 1- B 215300 Income Taxes Payable - Foreign 1- B 220000 Other Taxes Payable 2- B 220100 Sales and Use Tax Payable 1- B 220200 Foreign Withholding Taxes Payable 1- B 220300 Property Taxes Payable 1- B 225000 Deferred Taxes Payable 2- B 225100 Deferred Taxes Payable Federal 1- B 225200 Deferred Taxes Payable State 1- B 225300 Deferred Taxes Payable Foreign 1- B 225400 Deferred Tax Payables -Value adjustment 1+ B 230000 Total Long Term Liabilities 2- B 235000 Long Term Debt 2- B (C) SAP AG AC665 8-12 235100 Notes Payable - Long Term Portion 1- B 235200 Bonds Payable - Long Term Portion 1- B 239999 B/S Business Area - Clearing Account 1- B 240000 Minority Interest 2- B 240100 Minority Interest - Common Stock 1- B 240200 Minority Interest - Common Stock - ESOP Shares 1- B 240300 Minority Interest - Subscribed Capital Stock 1- B 240400 Minority Interest - Preferred Stock 1- B 240500 Minority Interest - Additional Paid in Capital 1- B 240600 Minority Interest - Treasury Stock 1- B 240700 Min. Int. - Treasury Stock, Reciprocal Holdings Inv. 1- B 240800 Minority Interest - Dividends Payable 1- B 240900 Minority Int. - Currency Translation Differences 2- B 240910 Min. Int. - Cur.Transl.Diffs - Prop, Plant & Equip 1- B 240920 Min. Int. - Cur.Transl.Diffs - Investments 1- B 240930 Min. Int. - Cur.Transl.Diffs - Stockholders´ Equity 1- B 240940 Min. Int. - Cur.Transl.Diffs - Other 1- B 240950 Min. Int. - Cur.Transl.Diffs - Rounding 1- B 241000 Minority Interest in retained earnings 2- B 241100 Minority Interest - Ret. Earnings - Prior Years 1- B 241200 Minority Interest - Ret. Earnings - Current Year 1- B 241300 Min. Int. - Ret. Earn. - CY prior to First Cons 1- B 241350 Min. Int. - Ret. Earn. - ANI Prior to Prop. Change 1- B 241400 Min. Int. - Ret. Earn. - Appropriation Transfers 1- B 241500 Min. Int. - Ret. Earn. - Appropriation Deductions 1- B 241600 Min. Int. - Ret. Earn. - Dividends Paid 1- B 241620 Min. Int. - Ret. Earn. - Dividends Paid Clearing 1- B 241630 Min. Int. - Ret. Earn. - Bonus Management 1- B 241800 Min. Int. - Ret. Earn. - Appropriations 1- B 247000 Minority Interest - Investments in Subsidiaries 2- B 247010 Min. Int. – Investments in Subsid. - Purchase 1- B 247020 Min. Int. – Investments in Subsid. - Proportional 1- B 247030 Min. Int. - Investments in Subsid. - Equity 1- B 247040 Min. Int. – Investments in Common Stock of Parent 1- B 250000 STOCKHOLDERS' EQUITY 2- B 250050 Total Subscribed Common Stock 2- B (C) SAP AG AC665 8-13 250100 Common Stock 1- B 250200 Common Stock - ESOP Shares 1- B 250300 Subscription Receivables 1- B 250400 Preferred Stock 1- B 250500 Additional Paid-in Capital 1- B 250600 Treasury Stock 1+ B 250700 Treasury Stock - Reciprocal Holdings 1+ B 250800 Stock Dividends to be Distributed 1- B 250900 Translation differences 2- B 250910 Currency Translation Adjustments - Prop., Plant & E 1- B 250920 Currency Translation Adjustments - Investments 1- B 250930 Currency Translation Adjustments - Stockh. Equity 1- B 250940 Currency Translation Adjustments - Other 1- B 250950 Currency Translation Adjustments - Rounding 1- B 251000 Retained earnings 2- B 251100 RE Prior Years 1- B 251200 RE Current year 1- B 251300 Retained Earnings- CY prior to First Cons 1- B 251350 Retained earnings - ANI prior to Proportion Change 1- B 251400 Retained earnings - Appropriation Transfers 1- B 251500 Retained earnings - Appropriation Deductions 1+ B 251600 Ret. Earnings - Dividends Paid 1- B 251620 Retained earnings - Clearing of Dividends Paid 1- B 251630 Ret. Earnings - Bonus Management 1- B 251700 Retained earnings - Clearing of Cons of Investment 1- B 251800 Ret. Earnings - Appropriations 1- B 300000 Sales revenue 2- C 301000 Sales revenue 2- C 301100 Sales (Third Parties) 1- C 301200 Intercompany Sales 1- C 302000 Sales Discounts and Returns 2- C 302100 Sales Discounts and Returns (Third Parties) 1- C 302200 IC Sales Discounts and Returns 1- C 303000 Cost Of Goods Sold 2- C 303100 Cost Of Goods Sold 1- C 303200 IC Cost Of Goods Sold 1- C (C) SAP AG AC665 8-14 304000 Sales Discounts and Returns - Foreign 2- C 305000 Total Expenses 2+ C 306000 Operating Income 2- C 310000 Operating Expenses 2+ C 310100 Raw Materials Consumed 1+ C 310200 Inventory Valuation 1+ C 310300 Packaging Materials Expense 1+ C 310400 Distribution Expenses 1+ C 310500 Heating and Electricity Expense 1+ C 310600 Subcontractor Services 1+ C 310700 Wages and Salaries 1+ C 310800 Pension and Employee Benefits Expense 1+ C 310900 Payroll and Withholding Expense 1+ C 311000 Medical Expense 1+ C 311100 Building and Equipment Maintenance Expense 1+ C 311200 Insurance Expense 1+ C 311300 Auto Expense 1+ C 311800 Goodwill Amortization Expense 2+ C 311810 Goodwill Amortization -Purchase 1+ C 311820 Goodwill Amortization -Proportional 1+ C 311830 Goodwill Amortization -Equity 1+ C 311840 Goodwill Amortization -Push-down 1+ C 311900 Depreciation Expense 2+ C 311920 Depreciation Expense - Buildings 1+ C 311930 Depreciation Expense - Furniture and Fixtures 1+ C 311940 Depreciation Expense - Transportation Equipment 1+ C 311950 Depreciation Expense - Machinery and Equipment 1+ C 312400 Rent expense 1+ C 312500 Postage and Shipping Costs 1+ C 312600 Telephone Expense 1+ C 312700 Travel Expenses 1+ C 312800 Supplies Expense 1+ C 312900 Other General Expense 1+ C 313000 Other Administrative Expense 1+ C (C) SAP AG AC665 8-15 313100 Professional Fees 1+ C 319999 OPEX w/o Depreciation &Amortization 2+ C 320000 Other Income and Expense 2+ C 320100 Interest Income 1+ C 320200 IC Interest Income 1+ C 320300 Dividend Income 1+ C 320400 IC Dividend Income 1+ C 320500 Other Income 1+ C 320600 IC Other Income 1+ C 320650 Revenue from Divestitures 1+ C 320700 Interest Expense 1+ C 320800 IC Interest Expense 1+ C 320900 Other Expense 1+ C 321000 Loss from Write-down Investments 1+ C 321100 IC Other Expense 1+ C 321150 Expense from Divestitures 1+ C 321200 Equity in Net Income of20 - 50% Subsidiaries 1- C 321300 Exchange Rate Gains (Losses) 1- C 330000 Income before Taxes 2- C 335000 Income Tax Provision 2+ C 340000 Income Tax Provision - Current 2+ C 340100 Income Tax Provision - Current Federal 1+ C 340200 Income Tax Provision - Current State 1+ C 340300 Income Tax Provision - Current Foreign 1+ C 350000 Income Tax Provision - Deferred 2+ C 350100 Income Tax Provision - Deferred Federal 1+ C 350200 Income Tax Provision - Deferred State 1+ C 350300 Income Tax Provision - Deferred Foreign 1+ C 360000 Income from Continuing Operations 2- C 360050 Non-continuing Operations 2+ C 360100 Gain (Loss) - Discontinued Operations-Net of Tax 1- C 360200 Gain (Loss) - Extraordinary Items-Net of Tax 1- C 360300 Gain (Loss) - Change in Accounting Principle-Net.. 1- C 370000 Net Income Before Minority Interest 2- C 370100 Minority Interest 1- C (C) SAP AG AC665 8-16 380000 Net Income 2- C 390000 Annual net income 1+ C 910000 Selected Item for Cur. Translation Affect. Earnings 1+ D 930000 Stat: Other Items 2- D 931000 Stat: Annual net income 2- D 931100 Total annual net income 1- D 931200 Total Annual Net Income- Offset 1+ D 931300 Minority interest in annual net income 1- D 931400 Minority Interest in Annual Net Income - Offset 1+ D 931500 Adjusted annual net income 1- D 931600 Adjusted Annual Net Income - Minority Interest 1- D 932000 Stat: Stockholder Equity for Equity Method 2- D 932100 Stat: Annual Net Income - Equity Method 1- D 932200 Stat: Dividends for Equity Method 1- D 932300 Stat: Bonus Management 1- D 932400 Stat: Translation differences 1- D 932500 Stat: GW Clearing within Cons Group 1- D 932600 Stat: Adjustment of Prior Period Earnings 1- D 933000 Stat: Goodwill 2- D 933100 Stat: Positive Goodwill 1- D 933200 Stat: Negative Goodwill 1+ D 939000 Stat: Overall Offsetting Item 1- D 950000 Stat: Stockholders’ Equity 2- D 950100 Stat: Common Stock 1- D 950200 Stat: Common Stock - ESOP Shares 1- D 950300 Stat: Subscription Receivables 1- D 950400 Stat: Preferred Stock 1- D 950500 Stat: Additional Paid-in Capital 1- D 950600 Stat: Treasury Stock 1- D 950700 Stat: Treasury Stock Reciprocal Holdings 1- D 950800 Stat: Stock Dividends to be Distributed 1- D 950900 Stat: Translation differences 2- D 950910 Stat: Cur.Transl.Diff. - Property, Plant and Equipment 1- D 950920 Stat: Cur.Transl.Diff. - Investments 1- D 950930 Stat: Cur.Transl.Diff. - Equity 1- D 950940 Stat: Cur.Transl.Diff. - Other 1- D (C) SAP AG AC665 8-17 950950 Stat: Cur.Transl.Diff. - Rounding 1- D 951000 Stat: Retained earnings 2- D 951100 Stat: RE Prior Years 1- D 951200 Stat: RE Current year 1- D 951300 Stat: Retained Earnings- CY prior to First Cons 1- D 951350 Stat: Retained Earnings- ANI prior Proportion Change 1- D 951400 Stat: Ret. Earnings - Appropriation Transfer 1- D 951500 Stat: Ret. Earnings - Appropriation Deductions 1- D 951600 Stat: Ret. Earnings - Dividends Paid 1- D 951620 Stat: Ret. Earnings - Clearing Distribution of Dividends 1- D 951630 Stat: Ret. Earnings - Bonus Management 1- D 951700 Stat: Ret. Earnings - Clearing Cons of Investments 1- D 951800 Stat: Ret. Earnings - Appropriations 1- D 962000 Stat: Neg. Stockholders' Equity for Equity Method 2- D 962100 Stat: Neg. SH Equity - Annual Net Income f. Equity 1- D 962200 Stat: Neg. SH Equity - Dividends f. Equity 1- D 962300 Stat: Neg. SH Equity - Bonus Management 1- D 962400 Stat: Neg. SH Equity - Currency Translation Diffs 1- D 962500 Stat: Neg. SH Equity - GW Amort. in Cons Group 1- D 962600 Stat: Neg. SH Equity - Adjusted Pr. Period Earnings 1- D C-1000 Group Share 1+ D C-2000 Group Share with Voting Rights 1+ D C-3000 Group Share Without Voting Rights 1+ D C-4000 Group Share in Annual Net Income 1+ D C-5000 Group Share, Direct 1+ D 2+ C EBITDA (C) SAP AG AC665 8-18