Step Acquisition in Proportionate Consolidation

Hi Friends,
I am in the process of configuring Proportionate Consolidation. I have configured the reclassification method-76110 with task 7611 (Adjustment to standardized Financial data) as suggested by Standard SAP. But I haven't configured the Methods & tasks of tasks 7628 (Adjustment to statistical Items) and 7627 (Adjustment to equity and Minority Interest Items) as I am not sure about their requirement in proportionate consolidation.
My concern here is how to take it up step holdings in subsequent consolidations as we have have taken a 100% proportion for first consolidation in elimination of Investment and equity.
Example:-
Holding Company Code : 1000
Joint venture Company Code : 5013
% of Holding: 70%
Through Reclassification task 7611, I have eliminated 30% balances and remaining 70% balances taken for consolidation. So I have taken % of holding as 100% in Additional Financial data with balances of 70% equity.
Next consolidation period My % of holding will be changing from 70 % to 80% due to step acquisition of 10% in same Joint Venture-5013.
Since in my First consolidation I have taken % of holding as 100% in my additional financial data, my concern here is how to proceed for elimination of this 10% holding.
Process Steps followed for Proportionate consolidation
1. Data Collection
2. Addfin Data for Investment with % of holding 100% and equity value (Proportionate) but % = 100%
3. Reclssification of standardised Fins data
4.Consolidation of investment
Thanks in Advance
VNK

Instead of taking proportionate equity input 100% and using reclassification function and quantity postings, adjust the % changes in the subsequent consolidation...
Regards
Naveen.KV

Similar Messages

Problem with step Acquision and subsequnet consolidation

Hi Gurus,
I am trying to do step acquision, problem is as follows.
A Ltd having % of holding @ first consolidation in BLtd 60%.
I have executed COI and posted elimination entries with 60%
In the next consolidation period I have increased my % of holding to 70%
I have executed COI task in the next period, system is taking that additional 10% only for subsequent consolidation.
Not referring old 60% ie 60%+10%=70%
System taking 0.00 => 10.00
Please help me to resolve the issue.
Thanks in Advance
Naveen

Hi,
Normally the COI activities as follows:
1.First Consolidation u2013 Occurs when a new consolidation unit is acquired / established and it is consolidated within the group.
2.Subsequent Consolidation u2013 Occurs when a consolidation unit is already consolidated in the group and the only changes in its equity are due to changes in the retained earnings. In the case of a subsequent consolidation the minority interests in the above mentioned items are posted.
3.Increase or Decrease in Capitalization u2013 Occurs when there is a proportional increase / reduction of the equity and of the participation, without any changes in the percentage of ownership. In the case of an increase / reduction in capitalization, the increase in the stockholdersu2019 equity is offset with the change in the book value of the participation.
4.Step Acquisition u2013 Occurs when there is an increase in the book value of a participant already consolidated and in the percentage of ownership. In the case of a step acquisition, the increase in the book value of the participation is offset with the change in the minority interests. Therefore, there is a reclassification between the minority interest items and the stockholdersu2019 equity items of the subsidiary, due to the change in the percentage of ownership.
5.Distribution of Dividends u2013 For subsidiary companies only
The system is taking only 10% because it is taking only the changes in its equity are due to changes in the retained earnings. Execute balance carry forward then the COI in next consolidation period is in same fiscal year.This should work now.
Regards
CSM Reddy

Proportionate consolidation customizing issue

Hello,
In order to do the customizing tasks of the proportinate consolidation,
we have followed the help steps of "Customizing for Proportionate
Consolidation (Standard Delivery) / Payables-Receivables Elim.; Minimum
Procedure (1) (Task 7612)"
And we found a customizing issue in the fast entry of the estep 002 of
the method 76120.
We can not add the "Trading partner" in the condition area.
We have check out the customizing of the related layout and it looks right.
How can we add this characteristic? What do I have to change to add it?
Regards.

Hi DAvid, I'm sending you my thread with the answers I've got if you are interested.
(DId not find a way to attach a link so I am sending the text).
Have a nice day,
Lilia
Posts: 11
Registered: 2/14/08
Forum Points: 2
   Proportionate consolidation
Posted: Jul 23, 2008 2:28 PM           Reply
Hello all,
I would like to know if someone uses the new functionality of proportionate consolidation.
I need to use the proportionate consolidation for some companies that are held by 50%.
I studied the SAP solutions and found out that before SEM ver. 6 there were 2 reclassifications: one that cuts off 50% of the amounts of proportionately consolidated company and the second one checks every I/C item that uses a proportionately consolidated company as a Trading partner and reclassifies 50% to predefined item (third parties). So, when you execute I/U Elimination, there are only 50% at each side and they are fully eliminated.
Simple example:
Company 1000 - fully consolidated
Company 1300 - proportionately consolidated
I/U receivables item in company 1000 with trading partner 1300 1,000 USD
I/U payables item in company 1300 with trading partner 1000 (1,000) USD
After first reclass. :
I/U payables item in company 1300 with trading partner 1000 (500) USD
Clearing item for proportionate consolidation (balance sheet) (500) USD
After second reclass.:
I/U receivables item in company 1000 with trading partner 1300 500 USD
Third parties receivables 500 USD
Before I/U Elimination:
I/U payables item in company 1300 with trading partner 1000 (500) USD
I/U receivables item in company 1000 with trading partner 1300 500 USD
After I/U Elimination:
I/U payables item in company 1300 with trading partner 1000 (0) USD
I/U receivables item in company 1000 with trading partner 1300 0 USD
The innovation that SAP suggests nowadays is a new Application for Document types that you use for the first reclassification (Reclassification: Apportionment of standardized financial data )based on statistical items that determine the holdings share. Afterwards you execute the I/U Elimination and after it you execute reclass (Reclassifications: Two-sided eliminations)
I don't see an advantage* of using this new solution in a case there is 50% holding share. I think that the first solution was more simple. The new solution can easily deal with percentage share other than 50% (for example, in case there is 60% proportionate consolidation). If there is 50% you need to update the statistical items.
Does anyone think differently? Did someone implemented the proportionate consolidation?
I would appreciate to get any kind of advice.
Sorry for the long thread.
Best regards,
Lilia
Kodam AV
Posts: 156
Registered: 3/3/08
Forum Points: 290
   Re: Proportionate consolidation
Posted: Jul 25, 2008 6:26 AM    in response to: Jason Ryker           Reply
Hello Lilia
I appreciate Lilia for posting challenging question , which hardly happens in this forum.
Although I used purchase method, I havenu2019t had opportunity to use proportionate consolidation method (as there was no need in all of my projects). However after going through the new stuff available in SEM 6.0, I think you are right in your conclusions (....earlier reclassifications more simpler and suitable when proportionate share is 50%....)
New innovative way seems to be more technically advanced (unlike in earlier versions proportionate share is maintained at customization level) as it makes use of document type and statistical items to record initial proportionate share as well as subsequent changes.
By the way which version do you use?
Cheers
Ambadas
Jason Ryker
Posts: 11
Registered: 2/14/08
Forum Points: 2
   Re: Proportionate consolidation
Posted: Jul 29, 2008 8:32 AM    in response to: Jason Ryker           Reply
Hi Kodam,
Thank you for your reply.
We use BI7 ver. 6 Enh 2.
Best regards,
Lilia
Mariano Rantz T...
Posts: 3
Registered: 9/1/08
Forum Points: 0
   Re: Proportionate consolidation
Posted: Sep 1, 2008 4:07 PM    in response to: Jason Ryker           Reply
the main difference or advantage is that oen consolidation unit could be proportionally consolidated in several groups and method changes are allowed. Beside that, the new consolidation is quite complex.
CU are porportionally consolidated and fully eliminated (afterwards other reclassification correct that effect).
The old recl. workaround was useful only if a CU was proportioanlly consolidated only once.
I am trying to use this new feature (I have follow exactly the standar delivery example but still have problems).
I hope you find this useful.
Mariano Rantz

Proportionate Consolidation

Hi,
I am using BPC for financial consolidation and I need to do proportionate consolidation for one entity, say Entity J. What this means is that Entity J is owned 50% by the parent. During the consolidation process, Entity J will upload its full trial balance into BPC but the parent will only aggregate 50% of Entity J's trial balance to the parent entity.
Is aggregating only the proportionate percentage owned of an entity to its parent automatically done in BPC?

Hello Lilia
I appreciate Lilia for posting challenging question , which hardly happens in this forum.
Although I used purchase method, I havenu2019t had opportunity to use proportionate consolidation method (as there was no need in all of my projects). However after going through the new stuff available in SEM 6.0, I think you are right in your conclusions (....earlier reclassifications more simpler and suitable when proportionate share is 50%....)
New innovative way seems to be more technically advanced (unlike in earlier versions proportionate share is maintained at customization level) as it makes use of document type and statistical items to record initial proportionate share as well as subsequent changes.
By the way which version do you use?
Cheers
Ambadas

Proportionate consolidation advise

Hello experts,
Can anybody give me some advise to implement the porportionate consolidation with BCS?
Do I have to implement all the methods and task indicated on the sap help?
http://help.sap.com/erp2005_ehp_02/helpdata/en/44/8ea67092113abfe10000000a155369/content.htm
Thank you in advance.

Hi Eugene,
I did not undertand why we have to activate the content.
According to the sap note: "Note: When you activate the content in a client, any existing SEM-BCS settings are overwritten"
If we applay the note all the current customizing will be eliminated. We have a new requeriment but we don´t want to eliminate all the actual customizing.
Can you explain it better?? If we need the proportionate consolidation, do we need to apply the note compulsory??
We have 602 sem-bw version, will be neccesary apply the note with this version??
Regards and thank you for your quick response.
Edited by: David Santos on Feb 17, 2009 1:34 PM

Step Acquisition

Scenario:
A owns B
First Consol at 2006:
% Ownership = 60%
Equity = 5000
at 2007
% Ownership = 70%
Equity = 4000
at 2008
% Ownership = 80%
Equity = 3000
Assuming we AFD collects the new % ownership and equity at relevant period year:
Will BCS automatically Consolidate per each amount at each period? Meaning:
2006 COI at
% Ownership = 60%
Equity = 5000
2007 COI at
% Ownership = 10% (increment %)
Equity = 4000
2008 COI at
% Ownership = 10% (increment %)
Equity = 3000
Then come up with correct consolidated data at 2008 ?

If I understand correctly, the ownership increases as the subsidiary's equity decreases. COI will automatically record goodwill with each increase in ownership.
As far as correct consolidation, it should correctly record minority interest with the purchase method or investment earnings with the equity method based on the percentage of ownership.

Consolidation Rules Formulas

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,

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.

Consolidation as per Equity Method_SEM-BCS

Hi Experts,
I am doing consolidation as per Equity Method. I am using Additional financial data for Investments and Equity.
However, when I execute C/I task I get an error message saying that Investments are missing for activity 01 in Investee unit combination. I have already entered Investment and Equity and also done the matching of Investment and Equity.
Also it is calculating one more activities as step acquisition. However no document is posted either for First Consolidation or Step Acquisition.
Can you please suggest !

Thanks Halim,
I am not using consolidation unit combination. It is only Legal Consolidataion. However, I have fixed the problem by changing the master data of consolidation unit. I have enabled FCEP.
I have one more question. Do I have to run Consolidation Group Change Task also when I am switching from Equity method to Purchase method for Associate companies?
When I am changing from Equity to Purchase method all the previous C/I postings are reversed, but the profit of Associates which was already accounted by holding company in the previous period is transfered to Net Income-Method Change and second effect is given to Goodwill (GW is enhanced).
Hence, post change of method, when I upload TB of Associate, the Net Income is not eliminated to the extent of the profit Adjusted on account of Method change.
Please suggest,
Thanks,
USR

Acquisition procedure in BCS?

What is the correct procedure for an acquisition?
u2022Create Consolidation unit in UCWB (name, short/medium/long description, local currency)
u2022Add consolidation unit to appropriate consolidation group
u2022Enter Year and Period of first consolidation (also FCEP flag if appropriate) if different to default value
u2022Assign consolidation method and accounting technique (purchase, equity etc)
u2022Assign parent indicator if consolidation unit is 100% owned by the consolidation group
u2022Load investor's and investee's investment data by RFD / AFD (depending Location of Values in C/I Settings)
   - Investor Unit & Investee Unit,
   - Percentage of shares owned
   - Investor's investment value
   - Investor's goodwill value (if any)
   - Investee's stock / share capital value
   - anything else require here?
u2022Run consolidation tasks in monitor (eg Load RFD from Data Stream)
u2022Run Consolidation of Investments task
Are these steps correct?
Are they in the correct sequence?
Are any steps missing?
Any investor/investee information missing?

Yes, it seems to be correct.
I would also perform the validation RFD/SFD = AFD for Equity and Investments if it is applicable.

Consolidation of Financial account

Dear All
My comp has executed the consolidation module for the finalisation of Financial statements .Can anybody help me out the process/Procedure to be followed for the testing of the consolidation .
With Best Regards
Saroj

The below given are NOT the steps, but activities required for consolidation of investments.
Enjoy ECCS,
Ambadas
1     First consolidation
2     Subsequent consolidation
3     Amortization of goodwill
4     Amortization of hidden reserves/FVAs
5     Increase in capitalization
6     Reduction in capitalization
7     Step acquisition
8     Partial transfer
9     Total transfer
10     Partial divestiture
11     Total divestiture
12     Liquidation
13     Reclassification of treasury stock
14     Amortization of investment
15     Write-up of investment
16     Horizontal business combination
17     Vertical business combination
18     Distribution of dividends
20     Increase in indirect investment
21     Reduction in indirect investment
22     Indirect transfer
23     Currency translation of goodwill
32     Purchase -> Proportional
33     Purchase -> Equity
34     Purchase -> Mutual stock
42     Proportional -> Purchase
45     Proportional -> Equity
46     Proportional -> Mutual stock
48     Equity -> Purchase
50     Equity -> Proportional
52     Equity -> Mutual stock
54     Mutual stock -> Purchase
56     Mutual stock -> Proportional
57     Mutual stock -> Equity
58     Method change
38     History
29     Push-down

Consolidation or group balance sheet

Dear All
I have 2 co.codes with same chart of account. I would like to create consolidate these two company codes and get singe balance sheet and profit & loss and individual ledgers as singel company for this purpose I have done
1. created two individual company codes with same chat of accounts ex. abcd, xyz and COA ABCD.
2. created another chart of company code as AB and assign this AB into ABCD.
3. created another company code as AB00 and assinged AB Chart of Account to this company.
4. Created Accounts for group accounts i.e for total sale 1 sales account total asset 1 Asset code etc.,
5. I have done all configurational Steps in IMG path "Consolidation Preparation (New)" path.(ECC 6.0).
6. I have posted some transaction in ABCD company.
7. When I try to see the transaction in AB00 company code I could see no data. Even Balance sheet through s_alr_87012284 I got the message as No list generated.
I did the above steps thinking that this is the way for consolidation.
1.If this is correct Why I am not able to see the data in Balance sheet or individual ledger wher I am missing i.e the data not posting into group accounts.
2. otherwise what is the correct way of doing consolidation
Can any one help me in configurationa steps
It would be very greatfull if help me
I am assuring full points.
srinivas

Dear Alex,
Thank you very much for your reply
But f.01 does not suit for consolidation bec'ze
1. inter units Transactions will not get nullify.
2. Consolidated account balance will not be known.
hope I am clear on my requiement.
b.s.rao

How to install consolidator????

Someone Please ,tell me a clear steps to install the consolidator
or give me the name of a Doument file or help file to help me to install it
Thanks a lot!!!

The "Oracle Lite for Handheld Devices Developer's Guide" Rel 4.0.1 part No.A86155-01 has the "clearest" instructions I've found. The document is available under the Documentation tab under software dowloads: 8i Lite in the OTN

Sequence of Activities & Divestiture

Our 4.0 implementation uses the default COI sequence of activities below:
Seq #     Act.     Activity text                   Stop here
1     01     First Consolidation
2     16     Horizontal Merger
3     04     Amortization of Fair Value Adjustments
4     05     Increase in Capitalization
5     06     Reduction in Capitalization
6     07     Step Acquisition
7     08     Partial Transfer
8     09     Total Transfer
9     17     Vertical Merger
10     10     Partial Divestiture                           X
11     11     Total Divestiture
12     12     Liquidation
13     13     Reclassification of Treasury Stock
14     14     Amortization of Investment
15     15     Writeup of Investment
16     02     Subsequent Consolidation
17     03     Amortization of Goodwill
18     18     Distribution of Dividends
When we recorded an end-of-period total divestiture (via AFD), the COI log does the following:
1.     Partial divestiture from 100% to 0% - reversing first consolidation elimination of investment, recording 100% to minority interest balance sheet, and recording gains
2.     Subsequent consolidation because ownership is now considered 100% the entire earnings for the period of divestiture is recorded as minority interest
3.     Total divestiture reversing first consolidation elimination of equity, reversing minority interest balance sheet from partial divestiture above, and gain for earnings of period of divestiture
What bothers me is that subsequent earnings recoded 100% minority interest. Why would this occur when the divestiture is at the end of the period per the master data? Should the activity sequence number for subsequent consolidation change to a number lower that for partial and total divestiture, but remain after the Stop? If so what are the consequences?
The only other alternative I can think of is to leave the activity sequence alone and record the divestiture at the beginning of the next period.
Any help with this is appreciated.

Dan,
Been looking at this myself these last few days. I know conventional wisdom is to not touch the sequence, but I can't see the delivered sequence working correctly (ever) in the case of divestitures if there is activity in the period. As discussed, perhaps this is what makes people chose the DABP option.
In addition to your case with the M/I due to the subsequent consolidation, if you were to issue a dividend in the period of divestiture that dividend income would be reclassed to minority interest as well.
My solution on the dividends to was to bring the activity above the partial transfer step, with the reasoning that in the event of a transfer you would be dividending to the old parent, not the new parent. Testing so far of our likely C/I activites seems to work with the sequence as desired.
For the subsequent consolidation I'm also having issues that we've PL30 topsided around, but I wouldn't want to do that in a transfer because of the income statement adjustments that would be necessary and the statistical account impact. In a future total divestiture activity, the gain/lose would be incorrectly calculated unless I got those statistical balances spot on to agree with the manual PL30.
I suspect the subsequent consolidation should be after the total transfer or vertical merger, with the reasoning that this activity should be performed in the new parent (err...cons group) in this case. Haven't had a chance to test all our likely activities with this scenario, but will probably need a solution real soon.
I'm familiar w/ this note on the topic, wihch is essentially the help.sap.com documentation in a little more technical detail:
https://service.sap.com/sap/support/notes/698955
But I'm not aware of any other documentation on the subject.
Finally....I remember when I took the SEM240 class a while ago they harped on not touching the default sequence, but those of us in the room with a live implementation had all changed from the default sequence.
Anyway...I don't really have a question or helpful info. Just surprised there's nothing more on the topic.
Chris

Cross investment data

Hello,
We ara trying to make a cross participation between 2 entities without success.
Scenario:
A has the 80% of B
B has the 5% of A.
In the investment data, first we create the participation of A over B as "first consolidation"
Then when we go to create the second investment data of B over A as well as "firs consolidation" the system get us a error.
The error message:
Diagnosis:
An activity First Consolidation with activity number 1000000012 already exists for investee unit A.
System Response
The system terminates processing.
Procedure
Create the activity for a different investee unit or add activity number 1000000012 to the activity.
Somebody can help us??

Hi,
First consolidation is an activity that the system performs the first time an investee is acquired in a consolidation group.
First consolidation of an investee is a prerequisite for processing in further activities of consolidation of investments.
So, Try to use activities "Step Acquisition" for the second investment in the same investee.
Hope it helps.

Method changes

Hi
I have another question in mehtod changes. In period 1 my investment in the subsidiary is 30. So the COI mehtod is equity in period one and it is first consolidation. In period 2 i have acquired another 25% with the result my investment has gone beyond 50% so the method is Purchase now. My question in the reported data, the additional acquistion should be represented as first acquistion or step acquisition. Appreciate an answer.

Hi
I found the answer.
Regds

Step Acquisition in Proportionate Consolidation

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