Group Reporting - Cost and Equity Method Consolidation of Investments

[Eyal_Feiler]

Hello Experts,

Does Group Reporting support both the Consolidation of Investments (C/I) method for cost and equity or just cost? In BCS the rules supported cost and we used another version to book the equity profits separately. In the Group Reporting help I see references to Equity but it wasn't clear.

Thank you.

Regards

Eyal

[CWI · Accepted solution]

Hello Eyal,

the activity based CoI supports the purchase method and the at equity consolidation.

I hope this helps, otherwise you might have to specify your question again.

Best Regards

Christina

[Li_Sen]

Dear Eyal,

Group reporting standard features do not support " equity technique" to eliminate investment for either rule based or activity based. it only supports cost technique, in order to have investment in S reevaluated, GR has a feature called Equity Pickup

whenever this topic arises, people tend to automatically refer to equity method in group reporting. That's why I used technique rather than method to avoid confusing, as we're talking about majority holding here.

Regards,

Sen

[Eyal_Feiler]

Thank you both for your responses.

to clarify the question is regarding what the accounting method is supported in GR rather than the configuration (rules vs. activity)? Cost -is where the investment amount doesn't change vs. equity - the investment amount of the parent is adjusted to account for the profit/loss of the subs. In the past BCS supported the cost method, the system knew to eliminate the investment amount - under the activity method there was an initial investment and any changes in investment increase/decrease for true change of investment not accounting for profit/loss.

So Arleigh you are saying that activity based supports both the cost and equity?
Regards

Eyal

[Arleigh]

Let me add perhaps a bit of clarification.

Group Reporting has TWO options for Consolidation of Investments (COI).

Rules Based - mentioned above. It supports only the Purchase Method of Consolidation (accounting rules for majority owner). It does not support Equity COI which is used when you are a minority owner. It is more flexible in setup and configuration but has this limitation.

Activity Based also mentioned above. I believe this code comes from BCS almost unchanged - It's less flexible in setup and config and users the older Log file reports. BUT it has more capability then Rules Based. It can do BOTH Purchase and Equity COI and it can also calculate Group Shares of ownership. Meaning if you have 3 or more levels of ownership you still enter the direct ownership % between companies but Activity Based calculates the multiple levels of Group Ownership for you

[srinath_cr]

Hi eyal.feiler2,

With respect to COI in context of S/4HANA GRC, it supports two approaches that is Rule based and Activity Based.

Meaning,

Rule-based consolidation of investment uses the reclassification steps you define in the reclassification methods and then executes the reclassification task via the Consolidation Monitor. It also uses the document types for group dependent postings. Task group S20 contains reclassification tasks 2100 and 2180 for rule-based consolidation of investments.

Activity-based (Supported from 1909 release) The results of activity-based consolidation are defined by activities that impact various business transactions. These activities are predefined by SAP S/4HANA Finance for group reporting so that they are readily available for customers to use. Some examples of these business transactions are first consolidation, subsequent consolidation, change in capitalization, and total divestiture. The system processes the task of category consolidation of investment and performs consolidation of investment calculations. In activity-based consolidation, you assign consolidation of investments methods to consolidation units in the Manage Group Structure app. Task group S21 contains automatic posting task 2101 for activity-based consolidation of investment.

Trust this helps

You can also follow the blog

Understanding Consolidation of Investment (COI) in SAP S/4HANA Finance for group reporting – Part I ...

Regards,

C.R.Srinath