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Ownership Hierarchy

Former Member
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141

Can you help me set up the ownership/group DIM for the following? first 2 groups are okay, but not sure how to relate the 3rd group

H1 owns

C1& C2

C2 owns

D1, D2, E1

D1 Owns

E1

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Former Member
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Hi Sulthan,

If you are doing legal consolidation it will depend on the percentage of ownership, control and consolidation. It will also depend on the GAAP you are following. 

Please provide more clearity on the GAAP and percentages.

Regards,

Kalyan.

Former Member
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Hi Kalyan,

Does the ownership structure really depend on the GAAP?

In the ownership structure, you just maintain which entities belong to which consolidation group, its consolidation method, and the percentages. These things can be maintained once technical structure has been identified.

Former Member
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Hi Nilanjan,

It depends for e.g, in some countires when holding is greater than 20% but less than 50% you use equity method, but in some countries with ownership within same range (20%-50%) if it is joint operation, it will use proportional method. Now, in legal consolidation equity entities will not appear in any group. But proportional entities will appear. Hope it clearfies.

Regards,

Kalyan.

Former Member
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Hi Kalyan,

You are referring to the methods to be used by the subsidiaries for consolidation. However, the question is to understand how to setup the hierarchical structure in the ownership manager, and not regarding the methods.

Former Member
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Hi Nilanjan,

Maybe I misunderstood, but in any case whether 1, 2 or 3 or more members are required in the group dimension will depend on the factors I stated above. For e.g, if E1 is a equity entity it will not even appear in the ownership structure for legal consolidation and we may require one less member in group dimension.

Maybe we are thinking and looking at it from two different directions .

Regards,

Kalyan.

Former Member
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Hi Kalyan,

Are you sure, if an entity is consolidated using equity method, then it should not appear in the ownership structure?

Ownership structure is designed to establish a relationship within the holding and its subsidiaries / JVs / associates. Irrespective of whether its consolidated using full / proportional / equity, it must be a part of the ownership structure. Otherwise, your consolidated entries will not be right. Even in case of equity method entities (associates), there are certain entries that needs to be eliminated / adjusted, and hence needs to be a part of the ownership structure.

The structure, as such, doesnt depend on the consolidation methods.

Former Member
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Hi Nilanjan,

I agree with you on the equity entity will appear, what I ment to say is the percentage and GAAP together will determine the method and the required number of groups. For e.g., D1 hold only, say, 15% of E1 then we will not have any subgroup S_D1. However, if it is porportional method then we may have S_D1.

Regards,

Kalyan.

Former Member
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Hi Kalyan,

As per your example, E1 is not a part of consolidation at all. Isnt it?

Former Member
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Hi Nilanjan,

It might be , depending on the percentage of ownership and method applicable as per GAAP.

There are several scenario we have to consider

For e.g., if C2 or D1 owns more than 20% but less than in E1, then it will appear in both sub-group.

However, if C2 own more than 20% and D1 own less than 20% (say 15%)and proportional method is not applicable then it will appear only in S_C2.

Regards,

Kalyan.

Former Member
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I appreciate both of your comments. To add little more clarity, I am adding the % as well .

H1 owns C1& C2 (100%)

C2 owns D1, D2 (100%),

C2 owns E1 (1%),

D1 Owns E1 (99%)

Former Member
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Nilanjan,

               Thanks for the structure. can we have more than one holding company in H1. you meant to say as follows. Also E1 should be listed only one time correct?

Ownership structure of H1 would be:

S_H1

|_H1 (holding company)

|_C1

|_S_C2

|__C2

|__S_D1

|___D1

|___E1

|__D2

|__E1

Former Member
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Hi Sulthan,

You may have only 1 holding compnay per group/sub-group.

E1 may come more than once if it is owned (>20% or as per applicable GAAP)by more than one group.

Regards,

Kalyan.

Former Member
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Kalyan,

              My question is, within H1 we cannot have more than one of E1.

So the entire ownership should be as follows???

S_H1

|_H1 (holding company)

|_C1

|_C2

|_D1

|_D2

|_E1

SC2

C2 - holding

D1

D2

E1

S_D1

D1 - holding

E1

Former Member
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Hi Sulthan,

Bold and italic are for group IDs and only bold are your holding companies in each group.

G_H1

     H1

     C1

     G_C2

           C2

           D2

          G_D1

                D1

                E1

Regards,

Kalyan.

former_member599120
Contributor
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Hi Sulthan,

Perhaps, you need HTG document to implement Kalyan suggestion. I would like to inform you it. Please take a look the link: http://scn.sap.com/people/sheldon.edelstein/blog/2011/08/18/ownership-manager-system-generated-propo...

Regards,

Wandi Sutandi