on 2009 Jul 07 8:17 AM
Dear Expert,
When I saw the consolidation example in Appshell Appset and I review the business rule "Consolidation Rules Formulas". That business rule contains the fields like as: Rule ID, Entity Method, Intco Method, All Formula, Group Formula, Minority Formula, and Remark. I just know that the field "Entity Method" and "Intco Method" contains the method code from the business rule "Consolidation Methods".
I have the questions like as:
1. We can input the field "Entity Method" and "Intco Method" only one code or the sequence of code in the business rule "Consolidation Rules Formulas". What is the different that we input one code with the several code ?
2. What is the uses of the field "All Formula", "Group Formula", "Minority Formula" ?
Thank you very much for your answer and I really appreciate it.
Best Regards,
Request clarification before answering.
I am very hesitant to agree that merging the Method Based Multipliers will give the same result as keeping them separate, in the IFRS starter kit.
As an example, how will you be able to develop an Elimination and Adjustment Rule that targets Newly Acquired companies and differentiate them from existing companies, in addition to treatment of mergers.
These methods (Leaving, Merger, Step Acquisition, Newly Acquired Purchase and Newly Acquired Equity) are distinguished in the method ID, then grouped through Method Based Multipliers. NOT for the purpose of the equation only (ALL FORMULA, GROUP and MINORITY), but also since the Elimination and Adjustment Rule does not have an Entity Field or Method Field, it has METHOD Multiplier.
To explain, Line one of the Method Based Multiplier addresses Existing Companies that have intercompany values with Existing Companies. Line two addresses Existing Companies that have intercompany values with newly Acquired companies, leaving, merged and so on.
Line three addresses newly acquired companies, leaving and so on with existing companies. and line four, newly acquired, leaving, ect... with newly acquired, leaving, ect...
Now the question is, how will you develop an elimination and adjustment rule that targets newly acquired companies, moves the data from F00 to F01, under the Audit_ID INPUT11, for the consoscope and the same month, then conduct the elimination. Or divested to be moved to F98, in addition to other flow/AUDIT_ID treatment. These are different than Existing companies that will not need to be moved from F00 to F01....
To add to it, how will you be able to differentiate in your ELIM and ADJUST Rules between:
All entities but Leaving
All but leaving, divested Interco
Newly Divested
Step Acquisition
Step Divestment
These methods cannot be grouped in the same method multipliers of the existing companies, as the ELIM and ADJUST rules have their field limitations and run on "Entity Group" as per Ownership Model. Thus the need to have these multiple Method Multipliers, despite having the same ALL_FORMULA, GROUP and MINORITY.
As for ALL_FORMULA, it is usually 1. which means automatically -1. this is to eliminate mainly the amount.
Group formula and minority formula are both referenced in the method multiplier (PCON, PCON-POWN, POWN, ect...) and dictate the amounts that will be posted and eliminated.
Minority is used for Equity type ownership, where the holding company owns less that 50% (since proportionate is no longer used in consolidated). it targets the Retained Earning of the held company (equity owned) and eliminates the value. then it reflects the % of ownership of the RE on the
Minority Interest Account of the Held company's consolidated Balance sheet. So if the holding company owns 25% of Company A, and the NI of the held company is 100 USD, the Minority Field in the formula is dictating that only 25 USD is reflected on the Minority Interest of the consolidated company's balance sheet. Meanwhile, all formula is posting the inverse of the amounts for all accounts and group is posting yet another calculation.
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Dear Wandi,
1. There is absolutely no difference. If you have one rule with multiple Entity and/or IntCo methods declared in your consolidation rules formulas, it will be executed for each duets of Entity and IntCo methods. It allows you to decrease the number of rules and inprove their maintenance.
As an exemple, if you take Rule010 in ApShell, it is span on 3 rows: the first one describes the calculation for a Global Entity method (86) with all IntCo methods (99) and contains specific percentages to eliminate in this situation ("All", Group and Minority formula fields). But the 2 other rows could be consolidated in a single row as their formulas are the same. In this case, we could have the following consolidation rules formula:
Rule010; 30,70; 99; POWN; POWN; ; .
This rule will then be executed for the Equity Entity method (30) with all IntCo methods as well as for the Proportional Entity method (70) with all IntCo methods.
2. These formula fields should contain the percentages to be eliminated in each situation. :
- "All" formula contains the global percentage to be eliminated. It is linked to the Destination "All" account field of the Automatic adjustments details table (at the application level). Please note that this field has to be equal to the sum of the Group percentage and the Minority Interest percentage;
- Group formula contains the Group Part percentage to be eliminated;
- Minority formula contains the Minority Interest Part percentage to be eliminated.
Those percentages are members of the Account dimension of your Ownership application. As an exemple, you can use the following values for percentages: [PCON], [PPCON] (Prior value of the consolidation percentage), [I_PCON] (Intercompany or partner value of the consolidation percentage), etc.
Hope this will help.
Best regards,
Julien
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Dear Julien Dyon,
Thank you so much for your information and guidance.
For your explanation at point No.1, I have question that how to make the sequence code. Is there have the rule to make the sequence code of Entity Method ?
And I have miss information about your statement at point No.2. The statement is "Please note that this field has to be equal to the sum of the Group percentage and the Minority Interest percentage". Would you like please describe me with something like example ?
Best Regards,
Dear Wandi Sutandi,
Regarding 1), I am not sure I understand correctly your question about "sequence code". But if you want to trigger the rule execution for several methods at the same time, you will nee to input your method codes separated with a comma. Of course, the Method and its associated code should exist in the Consolidation Method table (application set level) prior to being allowed to use it in a rule definition.
For exemple, if you would like to have all Entity methods used in a rule, then you can use '99' (meaning every methods) or, in ApShell/LegalApp: 90,86,70,30,20
Regarding 2), if you look at RULE010, you have the following:
RULE010 86 99 1 POWN 1-POWN
RULE010 30 99 POWN POWN [Null]
RULE010 70 99 POWN POWN [Null]
You can notice here that for the first row of the rule, Group formula is set to POWN (Owned shares/Outstanding shares100) and Minority formula is set to 1-POWN (or could also be set to PMIN, since PMIN = 100-(Owned shares/Outstanding shares100)). Therefore, "All" formula is set to 1 since POWN + 1 - POWN = 1.
For the 2nd and 3rd rows we could regroup using '30,70' in Entity mehod, the same principle applies: POWN + 0 = POWN.
Best regards,
Julien
Dear Julien Dyon,
Thank you so much for your help. I really appreciate your help because I get consolidation information from you so much.
I just want to make sure with my consolidation information which I got from another thread forum. Please tell me If my information is wrong. This my information :
1. I just know that the POWN is the formula as (Owned shares/Outstanding shares*100). The POWN is the OwnAccount member in Ownership application and we have to input that value through input schedule. After that, we run the consolidation script logic through Data Manager(DM). So, If the POWN is the formula, why we should to input that value (% percentage) through the input schedule ?
2. What is the different the field "Rule Type" in business rule "Consolidation Rules" with the field "Method Type" in business rule "Consolidation Methods" ? Because I saw that option is almost same both.
3. After we configured the consolidation business rules, we should to configure the automatic adjustment business rules. Why we should to configure the field "Adjustment Type" in business rule "Automatic Adjustments" ? Because I saw that option(Generic,Equity,Proportional,New,Leaving) is almost same with the option of Rule Type in business rules "Consolidation Rules" and the option of Method Type in business rule "Consolidation Methods".
Thank you for your help.
Best Regards,
Dear Wandi Sutandi,
1. You are right, POWN is a member of the OwnAccount dimension of the Ownership application and its associated value has to be input via an Input Schedule (or via the Dynamic Hierarchy Editor). In the Ownership application, percentages (PCON, POWN, PMIN) are entered for a specific Group by Entity.
POWN is mainly a member of a dimension, but in my previous example, it is a formula, too. 1-POWN is a formula, too, and to allow BPC to correctly calculate and split eliminations, you will have to input data in this member.
2. Rule Type is mainly used to define which rule will be used for Proportional or Equity eliminations. ALL (or blank) refers to any other situation. Method Type is used to define the consolidation (or Entity) method according to the percentage of Control (legal percentage):
- % of Control > 50% = Global
- 30% < % of Control <50% = Proportional
- % of Control < 30% = Equity
- 0% = Leaving (or sold company)
3. Here again, you are right. In the Automatic adjustment table, the field Adjustment Type indicates on which entities the elimination rule will be executed. Possible values depend of the Entity method, as for the Method Type in Consolidation Method.
Please remember that Consolidation Rules, Method and Formulas are handled at the application set level and Automatic Adjustments at the application level.
Best regards,
Julien
Dear Julien Dyon,
I'm so sorry to give you 2 point right now because the 6 point is disappear.
After I read your answer. I try to summarize your information and still have several question likes:
1. You've explained me about the uses of field "ALL Formula", "Group Formula", "Minority Formula", would you like please to tell me when I have to entry the value in that fields ? maybe you can tell me using accounting example (one account example)
2.The POWN is the OwnAccount dimension member and we have to entry that value (% percentage) in Ownership application. Let say that I entry the POWN value is 2% using input schedule in Ownership application, the field "All Formula" is 1, the field "Group Formula" is POWN, and the field "Minority Formula" is 1-POWN. So, the field "Group Formula" and "Minority Formula" are 2% and 1-2%. Is there right ? Please tell me wrong or correct my information if I have wrong information.
3.In Appshell appset, The field "Rule ID" contains the ID "RULE011", "RULE020", "RULE010",..etc and the field "Rule Type" always contains "ALL". Maybe the ID "RULE010" have the mean or some behavior in SAP BPC ? so, we have to set the field "Rule ID" is "Rule010" and the field "Rule Type" is "ALL" for "Stock Holder Equities" ?
Thank you so much for your attention.
Best Regards,
P.S: Please tell me about my question, I really need your help.
Edited by: wandi sutandi on Jul 27, 2009 3:30 PM
Hi Wandi,
To answer your second question when you enter percentages using the Dynamic Hierarchy Editor (or input schedule) the values are calculated and stored .. so for example if you enter 25% into POWN for an entity through DHE then the value is stored as 25/100 = 0.25 ... so your POWN =0.25 and and 1-POWN=0.75 .... so in the consolidation rules formula for example the value in your ALL destination account is split 25/75% respectively into the Group and Minority accounts ..
An example for point 1 would be "Investment" split into Share capital and Minority Interest......
Thanks,
Prasanth.
Dear Prasanth Gandlur,
Thank you so much for your attention. When I saw your information for point number 1, I don't know exactly. Could I know more please, how to configure the business rules of consolidation rules,consolidation methods,consolidation rules formulas for your example "Investment split into share capital and minority interest" ?
I really appreciate your guidances
Best Regards,
Hi Julien,
I found this thread and it answered my question on adding the multiplier rules together when they use the same formulas. Thanks for that.
I have one other question on the INTCO METHOD that you might be able to help me with. Let me try to explain on the basis of an example.
Lets say we have a multiplier with the settings as per below.
RULE010 70 30 PCON POWN PCON-POWN
Now I'm consolidating an entity that has method 70 configured in the ownership cube (meaning it is in scope) the entity has an amount on an source account that configured in an adjustment and elimination rule that uses this multiplier.
How exactly does the 30 configured in the INTCO METHOD come into play? Is it as such that it only executes the formulas when the amount is booked against an inter company party that has Method 30 configured?
I hope I have explained it correctly and would really appreciate if you could take some time to answer my question.
Marijn
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