FinancialConsolidationMay16,2004DavidYeung0.1AgendaSection1 ProcessOverview 0.25Section2 RolesandResponsibilities 0.25Section3 SAPConcepts 0.5

Break 15minsSection4 StepsinSAP 1.0Section5 ExercisesandSolutions(RefertoAttachment) 1.75Duration(inhour)ObjectivesAttheCompletionoftheCourse,youwill:Identifyand“Understand”relevantconceptsoffinancialconsolidationLearntouseSAPtoCreateandMaintainconsolidationmasterdataUseDataMonitortomanagedatacollectionUseConsolidationMonitortomanagetheconsolidationprocessUnderstandhowtorunreportsontheconsolidationledgerSection1 ProcessOverviewChapter3 ConceptsGlobalparameters

Consolidationunitsandgroup

FSitemsandsubitems

DataCollection

Consolidation

InformationSystemConcepts:GlobalParametersGlobalparametersareimportantsettingsforEC-CSthattypicallyremainthesameforaworksessionTheglobalparametersaredisplayedinastatusrowatthetopofeveryscreenintheconsolidationfunctions.OrganizationstructureDimension:CCConsolidationPeriodVersion:100OtherSettingsConsolidationChartofAccounts:CCLedger:CCConcepts:ConsolidationUnitsThesmallestunitelementinacorporategroupstructurethatcanbeusedasabasisofcompleteconsolidation.Mappedtocompanycodeona1-to-1basis,usingthesamecode.InConcord,alltheconsolidationunitsbeingsetupareactuallegalentities(withtheexceptionofCCLatinAmericaandKeystoneSalesGraphics).adummyconsolidationunitwillbeestablishedtoholdhistoricalbalancesthatexistinthe“Elim”company.Concepts:ConsolidationGroupsAuser-definedgroupofconsolidationunitscreatedforconsolidationandreportingpurposes.TopleveldefinitionofConcordConsolidationGroupConcepts:ConsolidationChartofAccountAsetoffinancialstatementitemswhichcorrespondtotheG/LaccountsintheconsolidatedbookOneconsolidationchartofaccounts(CC)inConcordGroupEachitemkeyinthefinancialstatementversionintheoperationcompanymustmatchacorrespondingFSitemintheconsolidationCOAThecodingofeachFSitemwillbe9digits,thesameastheitemcodeinthefinancialstatementversionEachGLaccountismappedtotheConsolidationCOAthroughthefinancialstatementversionMappingbetweenG/LandFSitemsG/LaccountsE.g.Cash-Pettycash10000010GeneralLedgerECCS-FSitemsFinancialstatementversionCONS(extract)G/LaccountsassignedinFSversionValueitemTotalitemConcepts:FSitemsandsubitemFSItemsarethebasiccomponentsoftheConsolidationchartofaccountTherearethreetypesofFSItems:1.Valueitems2.Totalsitems3.TextitemsItemsontheFinancialStatementversionaremappedtothevalueitemstypeFSitemsontheConschartofaccountConcepts:FSitemsandsub-itemcontinue…Subitemisatypeofsub-assignmentsforFSitemsUsingsubitemcategory,wecanclassifythevaluesofthesubitemStandardsubitemsincludeTransactiontypesfortransferredassetsFunctionalareaShareCapitalRetainedEarningsTransactiontypeinG/LSubitemsinECCSG/LpostingECCSdatabaseConcepts:DataCollectionDatacollectionprocessinConsolidationistheprocessforcollectionoffinancialdatareportedbyindividualconsolidationunits.TheDataMonitorcanbeusedtomanageallthesetasks:BalancecarriedforwardDatacollection(PeriodicextractfromG/L)RetainedEarningsCalculationManualadjustmentsCurrencytranslationValidationofstandardizeddataConcepts:DataCollectionProcessBalanceCarriedForwardDataCollectionRetainEarningsCalculationManualAdjustmentCurrencyTranslationValidationofStandardizedFinancialDataConcepts:DataCollectionMethodsPeriodicExtractFlexibleUploadEC-CSInConcord,thetwomethodsofdatacollectionarePeriodicExtract–allgeneralledgerpostingsmadeinSAParetransfertotheconsolidationmoduleonaperiodicbasis(e.gmonthly).ThismethodappliestoallactivecompanycodesmaintainedinSAP.FlexibleuploadwithMSExcel–Thismethodofdatacollectionallowstheusertokey-inthefinancialdatainanExcelspreadsheet,anduploadtoSAPthroughusingadatafile.ForConcord,onlydormantcompaniesnotactiveinSAPwillusethismethod.Concepts:CurrencyTranslationExchangeRateFixedassetsInventoryHistoricalCurrentRateTranslationSetsLocalReferenceGroupDiff.FixedassetsS=2.0H=3.01.0Buildings50010001500500Machinery50010001500500Inventory

S=2.0S=2.0Rawmat.500100010000Diff:CurrencytranslationdifferencesConcepts:ConsolidationProcessIntercompanySalesandCOSEliminationIntercompanyA/RandA/PEliminationConsolidationofInvestmentManualAdjustmentTradingPartnerinIntercomCustomersandVendorsIntercomCustomermasterECCSdatabaseConcepts:InterUnitEliminationAggregateBalanceSheetFixedAsset250Equity280ICReceivables100ICPayables120Inventory50

400

400GroupBalanceSheetFixedAsset250Equity280

Inventory50RetainedEarnings20

300

300XXConcepts:ConsolidationofInvestmentParentInvestmentBookValue$10,000ParentInvestment%Share100%SubsidiaryEquity$8,000

InvestmentBookValue$10,000Share%xShareholdersEquity100%x$8,000Goodwill

$2,000SAPuseboththetotalsdatabaseandadditionalfinancialdataintheEC-CSmoduletoobtaininvestmentandequitydataforeachconsolidationunitSection4 StepsInSAPMaintainGlobalParametersMaintainConsolidationGroupsMaintainFSItemsDataMonitorConsolidationMonitorConsolidationReportSection1MaintainGlobalParametersAccounting>EnterpriseControlling>Consolidation>Globalparameters(CXGP)MaintainGlobalParametersMaintainGlobalParameters...continuedThefollowingmustbeinputastheveryfirststep:Dimension:CCVersion:100FiscalYear:Period:ConsCOA:CCLedger:CCThefirststepistospecifytheorganizationalunitsandtheconsolidationperiodSection2MaintainConsolidationGroupsAccounting>EnterpriseControlling>Consolidation>Masterdata>ConsolidationGroups>Hierarchy>Maintain(CXGP)MaintainConsolidationGroupsMaintainConsolidationGroups...continuedOntherighthandside,eachconsolidationgroupmastercanbedisplayedorchangedTheconsolidationgroupsandconsolidationunithierarchyisdisplayedontheleftMaintainConsolidationGroups...continuedWhentheconsolidationunitisselected,themasterdatarecordcanbedisplayedorchangedVariouscontroldataismaintainedandorganizedindifferenttabsSection3MaintainFSItemsAccounting>EnterpriseControlling>Consolidation>Masterdata>FSitems>Hierarchy>Maintain(CX16)MaintainFSitemsMaintainFSitems...continuedOntherighthandside,eachFSitemmastercanbedisplayedorchangedTheConsolidationchartofaccounthierarchyisdisplayedontheleft.

EachFSitemismappedtoarangeofGLaccountontheOperatingchartofaccountthroughaFinancialStatementVersioninGLAccounting>EnterpriseControlling>Consolidation>Masterdata>subitems>Change(CX1S4)MaintainFSitems…continuedMaintainFSitems...continuedOntherighthandside,eachFSitemmastercanbedisplayedorchangedTheConsolidationchartofaccounthierarchyisdisplayedontheleft.

EachFSitemismappedtoarangeofGLaccountontheOperatingchartofaccountthroughaFinancialStatementVersioninGLSection4DataMonitorAccounting>EnterpriseControlling>Consolidation>DataCollection>Monitor(CXCD)DataMonitorDataMonitor...continuedPre-defineddatacollectiontaskstoberunintheorderspecified.SometaskmaynotbeapplicabletoallunitsForeachtask,highlighttheiconforaspecificconsolidationgroup,andclickon“Testrun”or“Updaterun”toexecutethatparticulartaskEachiconshowthestatusofeachtaskagainsteachconsolidationunit/groupDataMonitor...continuedClickonthisicontodisplaythecolor/symbolkeyforeachsymbolonthemonitorOverallstatusforeachconsolidationgroupandunitStatuskeyforindividualtaskDataMonitor–balancecarryforwardTheBalanceCarry-forwardtaskwillbeactiveforthefirstperiodofthefiscalyearClickon“TestRun”or“UpdateRun”toexecuteResultsoftheBalanceCarryforwardwillbedisplayedDataMonitor–datacollectiontaskDisplayorchangeadditionaldata.E.g.ChangeininvestmentorgoodwillAfterclickingonthe“TestRun”or“UpdateRun”iconforthe“Data”task,thisscreenCurrentTaskandconsolidationunitisdisplayedhereUsethissidetoexecutedataupload:PeriodicextractorFlexibleuploadAccounting>FinancialAccounting>GeneralLedger>InformationSystem>GeneralLedgerReports>BalanceSheet/ProfitandLossStatement/CashFlow>General>Actual/ActualComparisons>BalanceSheet/ProfitandLossStatement(S_ALR_87012284)DataMonitor–PeriodicExtractDataMonitor–PeriodicExtractUsefinancialstatementversion“CONS”Thereportcanberuntwice:CheckforunassignedG/LaccountswithoutFSitemsassignmentGeneratingtheextractfileforimportintoEC-CSItisrecommendedthattheextractionbeperformedforonecompanycodeatatimeDataMonitor–PeriodicExtractInthe“Extracttoconsolidation”field,putin“1”forextractbycompanycodeTogeneratetheextractfile,gotothesecondtab“SpecialEvaluations”oftheselectionscreenDataMonitor–PeriodicExtractSelectthelogicalfilename“ECCS_FILE”andclickonExecuteDataMonitor–PeriodicExtractNoticethefilenameoftheextract,basedonthetimestamptocreateauniquenumberReportdataaredisplayedonthescreenDataMonitor–PeriodicExtractUsethesameuniquefilenamegeneratedbySAPearlierClick“Execute”toimportandwritedataintoconsolidationDataMonitor–PeriodicExtractResultsoftheextractdisplayedafterasuccessfulimportDataMonitor–FlexibleUploadTheuploadfileinExcelshouldbesavedas“TabDelimited”format.Selectthetextfilename,andchooseFileFormat“ASC”DataMonitor–FlexibleUploadTheresultsoftheuploadwillbedisplayed,togetherwiththedetailsofthetransactionforeachconsolidationunit.DataMonitor–retainedearningscalculationClickon“Testrun”or“Updaterun”toexecute,afterdatacollectionhasbeenrunsuccessfullyRetainedearningscalculationisapplicableforunitsthatuseperiodicextractDataMonitor–manualadjustmentClickonthe“UpdateRun”topostmanualadjustmentsHighlightthe“Adjustment”taskontheconsolidationunitSelectDocumenttype:D1fornoreverse,andD2forautoreverseDataMonitor–manualadjustment…continuedTypeintheFSitemsoneachlinePutinDebitandCreditwith“+”or“-”sign,andpopulateboththeamountsinlocalandgroupcurrencyfieldThebalanceofthedocumentshouldbezeroDataMonitor–currencytranslationEachgroupofaccountswillbetranslateatpre-definedexchangeratetypemaintainedintheexchratetableTranslationdifferencewillbepostedtospecifictranslationdifferenceaccountsCurrencyTranslationisrequiredforeachconsolidationunitwithalocalcurrencydifferentfromthegroupcurrencyDataMonitor–validationoftotalsdataThisfinaltaskusepredefinedrulestovalidatethetotalsrecordtomakesurethattheyarebalance.Theresultsofthevalidationwillbedisplayedafterthetaskiscompleted.Section5ConsolidationMonitorAccounting>EnterpriseControlling>Consolidation>Consolidation>Monitor(CX20)ConsolidationMonitorConsolidationMonitor...continuedConsolidationtasksinclude:InterCoSalesCOSEliminationInterCoARAPeliminationConsolidationofInvestmentManualAdjustment SimilarLayouttotheDatamonitorwithtwomaindifferences:Onlyconsolidationgroupisshown.Differentsetoftasksaredefined.ConsolidationMonitor...continuedConsolidationtasksinclude:InterCoSalesCOSEliminationInterCoARAPeliminationConsolidationofInvestmentManualAdjustment SimilarLayouttotheDatamonitorwithtwomaindifferences:Onlyconsolidationgroupisshown.Differentsetoftasksaredefined.ConsolidationMonitor–InterCoSalesandCOSElim.Theeliminationentryispostedinthisarea,listingtheFSitemsandtheDebitandCredittoGroupcurrency.PostingattheconsunitaredoneatthegroupcurrencylevelThesystemautomaticallyposteliminationentriesforeachconsunit.Theconsunitandtheeliminationpartnerislistedhere.ConsolidationMonitor–InterCoA/RandA/PElim.EliminationdifferencesbetweenthetwounitswillbepostedtoeliminationaccountsEachtradingparnterpairisidentifiedandtheirintercompanyARandAPentriesareeliminatedConsolidationMonitor–InterCoA/RandA/PElim.EliminationdifferencesbetweenthetwounitsmaybecausedbytimingdifferencesThelineitemsoftheeliminationdocumentscanbedisplayedindetailsConsolidationMonitor–ConsolidationofInvestmentBeforeconsolidationofinvestmentcanbeexecuted,additionaldatainchangeofinvestmentmustbemaintained:Shareownership&Investmentbookvalueinparent,andequityandgoodwillinformationinsubsidiaryunitConsolidationMonitor–ConsolidationofInvestmentDoubleclickonthesubsidiaryunittoopenuptheadditionaldatascreenforconsolidationofinvestmentConsolidationMonitor–ConsolidationofInvestmentAtthe