consolidation of financial statement

[former_member584269]

Dear All,

Namaste..

this is my first post on SAP SCN. feeling like first day of school. excited yet nervous. how people judge me ! I think I m going to tell something sensible
but what if adroit will find it buffoon's thought. but I think if I want to be graduate I have to face first day of school..

I have a situation where there is one parent company in India and four subsidiaries in different countries. all are on sap platform with different company codes and follows uniform fiscal year.

although we have facility to consolidate financial statement in SAP by "Consolidation" module, I have other idea of doing same.

with a vanilla example I will elaborate the same.

Suppose there is Parent Company P and Subsidiary S. P sold goods at price 100 to S. assuming that these goods are sold by S to out side world and there
is no other transaction in the current year in both the companies, following will be the financial statement of P and S

All company's stand alone financials statements can be drilled down by F.01 with proper FSV. but if I want conso financial statement I have to do inter
company adjustment. for that if I create a new company code Say 9999 and if I extend GL, Vendor and Debtor in this company code and do journal entries as follows

1. Sale Dr         100

  to Purchase Cr   100

1. Debtors Cr   100

  to Creditors Dr    100

and then if I populate all three company codes in F.01 with proper FSV and execute financial statement. I will get consolidate financial statement which
will show only those transaction which are other than inter co. i.e in our case nothing.

However this was very simple example but when it comes with 6 inter company and voluminous transactions it becomes difficult to gather data for such inter company eliminations. If we create z report for such elimination which gets data for entire group companies and post journal entries for elimination in company code 9999. it becomes easy task.

Thanks & Regards

CA Chintan Trivedi

I am beginner in sap and taking training for FI module. I have functional specification of z report for inter company elimination if any one like to comment on.

[former_member584269 · Accepted solution]

Hi

kudos

I created report with the help of Abaper for getting data for transaction with inter company. which gives inter co-trancations of all group company codes by just giving posting date in selection screen. which is matching with FBL1N, FBL5N and FBL3N in individual company codes.

so first stage which is getting data for inter company elimination is achieved now i can see diffenrence between two company's transaction which are nothing but inter co reconciliation items so i need to record those transaction in respective company codes so that i can eliminate exactly same amounts from both company codes.

second stage of creating separate company code for passing elimination entries is under process.

i hope it will work soon.

Thanks & Regards

CA. Chintan Trivedi

[kathiresan_nagarajan · Accepted solution]

Hi Chintan,

I was just thinking of your solution for consolidated reporting. It seems to be feasible, technically. Thanks for your logical reasoning. But I'm not sure whether it is acceptable from accounting standards perspective. I think, it will be additional burden for the users to eliminate Intercompany entries and carrying out some month end closing activities for the dummy company code.

Is it allowed to create a company code, though there is no legality purposes? I think, it is fine. But please confirm.

I hope, you might have implemented this solution, by now. Did the solution work? Have you faced any drawbacks with this solution? Please let me know

[former_member584269 · Accepted solution]

Hi,

sorry for late respond..

yes we implemented the solution and it works perfectly fine, all you need is one company code for posting elimination entries and a report which fetches inter co transactions using trading partner functionality.

there is no restriction from legal stand point.

just think what you do if you don't have BPC, you transport trial balance of individual company codes in excel and make adjustment in excel to arrive at consolidated financial statement.. now this adjustment you do in SAP or excel how does it matter to legal authority ?

[former_member584269]

more than 200 people have viewed the post. no one is commenting or criticizing. feeling strange.

one reason can be it is simple and effective solution but since it substitutes SAP standard process no one is liking to appreciate.

or it is not clear from my post that what i am trying to tell.

or it is stupid idea, if so please elaborate how it will fail to meet the purpose.

Regards

Chintan

[Former Member]

Hi Chintan,

I am not quite sure what this has to do with BPC. In BPC you would load / enter all IC data with correct partner code and run an automatic elimination.

BR,

Arnold

[former_member584269]

Thank you for your reply sir.

The above is solution for those who dont have or dont want to BPC implemented and have to fufill limited purpose of doing consolidation of financial statements without disturbing individual stand alone company's accounts.

BPC is quite broad module which provide business planning and consolidation. consolidation further provide various facalites one of which is IC elimination. not all companies have situation that demands BPC to be implemented.

[former_member584269]

Dear All,

please give your comments.

Regards

[suma_mani]

Hi Chitan,

What should be the results if you are run F.01 for 3 company codes ( I.E Parent ,Subsidery and 9999) after passing adjustment entry.

Regards

ManiKumar

[former_member584269]

Hi ManiKumar,

thanks for taking interest

we will pass adjustment entries(i.e inter co elimination) in 9999 company code. these company code will have no other entries.

so if we run F.01 with all company code. it will cause elimination of inter company transactions.

because i m nullifying effect of sale from parent and purchase of subsidiary in company code 9999.

by these stand alone company codes are not getting affected.

Regards

Chintan