Group reporting: Unable to Consolidate correctly Equity based method entities- indirect shareholding

[TULLEYC]

Dear community, I have the following Group structure and would like to know why my consolidation is not producing the anticipated results: with Group reporting cloud based version using Rules based Cost of investments.

Group structure : Single Group A where:

Company J184 is the Holding company and  company J0196  and company 197 are both Equity based investments. 

Company J0184 owns 30% in Company J0196. The participation ( cost of investment) of J0184 in J0196 is  52,000

Company J196 owns 40% in company J0197. The Participation( cost of investment) of J0196 in J0197 is 8,000

The Group share of J184 in J0197 is 30% x 40% =12%.

All data that has been imported into the system is data import.png.

Once the consolidation has been run, I see immediately that the Cost of investment of J0196 in J0197 is eliminated twice, once through the PCC process in Document 0Z preparation of Group changes -8000 and also document 3A  investment of Equity elimination -8000.  So the cost of investment 172100 is eliminated twice. 

How should the system be set up so that the cost of investment is not eliminated twice and we have an over elimination which is clearly incorrect.  I also see other issues but I would like to start the discussion here. Looking forward to hearing from an expert on this soon.

kind regards

Colin

[Chuma]

Hello @TULLEYC 

Thanks, Colin, this is very helpful.

Brief response to your two points.

App name-
The app I meant is Manage Ownership Data (tile under Consolidation → Ownership). App IDs differ by tenant and release, so don’t worry if you don’t see F3440.

Manage Consolidation Group Structure - Unit View

How to exclude indirect ownership from the investment-elimination rule so 172100 is not affected twice

Do two things:

Maintain ownership as direct-only in the master data.

In Manage Ownership Data, maintain only the direct links:

• J0184 → J0196: S0002 Direct Share = 30%
• J0196 → J0197: S0002 Direct Share = 40%

Do not keep a J0184 → J0197 line at all (neither S0002 nor S0001)

Run Calculate Group Shares and Post Group Shares so the system derives the 12% indirectly for reporting, but there is no direct J0184↔J0197 relationship for rules to trigger.

Restrict the elimination rule for 172100 to direct share only.

In configuration, Define Rules for the Elimination of Investments

Find the rule that removes FS item 172100 (Investments in Subs/JV/Associates) with document type 3A.

Set Share for calculation to Direct Share (S0002).
This ensures the rule doesn't apply to group or indirect shares.

Make sure the rule requires a Partner Consolidation Unit, meaning it only works when there's a direct parent–child link.

For the Equity Method consolidation method, either:

Deactivate/remove any 172100-elimination row or keep it active only for subsidiary or proportionate methods, not for equity method methods.

Practical effect:
J0196↔J0197 (direct) still eliminates 172100 once.
J0184↔J0197 (indirect) won’t trigger because there's no direct link, and the rule only applies Direct Share.

Check your method assignment

For equity-accounted entities, use the provided Equity Method naming/numbers, which vary by content, but fall under the category Equity method.

Avoid using a Parent-Direct Shares method for equity-accounted investees; that method typically applies to full/prop subsidiaries and can unintentionally trigger 172100 elimination.

Carry out the sequence to verify.

Ownership: Calculate Group Shares → Post Group Shares

Consolidation Monitor: 02 Prepare Group Structure Changes: changes should not affect the equity-method units → 30 Consolidation of Investments

Check 172100 on J0197: you should see only one elimination in the direct J0196↔J0197, not two.

SAP Help-Manage Data Ownership

Please let me know how it goes.

With regards

Chuma