Sap bpc nw 10.0 consolidations ( ic elimination) implementation guide v1 p

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SAP BPC NW 10.0 Knowledgebase

Inter Company Elimination(IC)
Implementation Guide

A SAP EPM Community Services

Author: Chief Architect:
Sulthan Mohammad Jothi Periasamy
SAP EPM/BPC Project Lead/Manager/Architect SAP HANA/EPM/BI/EIM Community Thought Leader
01/01/2012
SAP EPM Community Member SAP BPC/BOBJ/BW/MDM Community Domain Champion
sulthan1@gmail.com Joesaran@gmail.com , (916)-296-0228 - Cell

CloneSkills, Inc., http://www.CloneSkills.com , Info@CloneSkills.com , 1.800.836.8959, Page - 1

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Table of Contents

Business Scenario: ......................................................................................................... 3
Overview: ........................................................................................................................ 5
Business Example: .......................................................................................................... 6
Consolidation Business Process Flows: ........................................................................ 11
Consolidation (IC Elimination) Building Blocks: ............................................................. 12
Consolidation (IC Elimination) Implementation Steps: ................................................... 13
Consolidation (IC Elimination) Implementation: ............................................................. 14
Consolidation Building Blocks: ...................................................................................... 15
Data Preparation: .......................................................................................................... 16
Solution Building Blocks: ............................................................................................... 20
Implementation:............................................................................................................. 24

Appendix: ...................................................................................................................... 62
Log File – IC Elimination Run ........................................................................................ 63
Log File – Currency Calculation .................................................................................... 64
Disclaimer: .................................................................................................................... 65

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Business Scenario:
During period close or month end close or quarterly close the
accounting concepts, the revenue generated within the group by
exchanging the goods and services with affiliated companies needs
to be eliminated.

All Inter-Company activities and balances should be eliminated within
in a group when the group reports the financial results of entities
within the group. In any given group, the entities and the partner
doing business with should only be present. For this unique
requirement, the IC Elimination process follows the concept called
“posting at first common parent”.

Holding Company
Holding company is a company that owns other companies'
outstanding stock. The term usually refers to a company
which does not produce goods or services itself; rather, its
purpose is to own shares of other companies. Holding
companies allow the reduction of risk for the owners and can
allow the ownership and control of a number of different
companies. In the US, 80% or more of stock, in voting and
value, must be owned before tax consolidation benefits such
as tax-free dividends can be claimed.(Source : Wikipedia)

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Parent Company
A parent company is a company that owns enough voting
stock in another firm (subsidiary) to control management and
operations by influencing or electing its board of directors. A
parent company could simply be a company that wholly
owns another company. This would be known as a "wholly
owned subsidiary." (Source : Wikipedia)

Subsidiary
A subsidiary company, subsidiary, or daughter company [1]
is a company that is completely or partly owned and wholly
controlled by another company that owns more than half of
the subsidiary's stock.[2][3] The subsidiary can be a
company, corporation, or limited liability company. In some
cases it is a government or state-owned enterprise. The
controlling entity is called its parent company, parent, or
holding company. (Source : Wikipedia)

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Overview:

The IC Elimination process is used to identify the inter-company
activities and balances. This process can also post records so that
these activities and balances are fully eliminated for the group.
IC Elimination entries should be reflected only in groups containing
both the entity and the partner entity.

• The data is collected either by an Input Schedule or by using
the Data Import option in the Data Manager (DM) package. In
this guide, an input schedule is used to collect the data.
• Currency Conversion process is used to translate the local
currency (EUR) to USD using the standard Currency
conversion DM package
• IC_ELIMINATION Data Manager Package is used to generate
the entries to post to the elimination entities which are created
especially for this purpose.

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Business Example:

In the following organizational structure, the entities’ intercompany
accounts needs to be reconciled to reflect the operations of all
subordinate organizations that have an effect on the parent.

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As part of the reconciliation, the IC Elimination process will be
performed for the lower level intercompany entities China, Singapore,
India & Japan. The adjustments will be made through the special
entity “AP Elimination”.

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List of Inter Company Transactions:

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Sample GL Data: Scenario I:

This guide demonstrates the following scenario and how the
elimination records are generated. The elimination report based on
this scenario is given at the bottom.

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Sample GL Data - Scenario II:

The following scenario shows that there is a difference in balance and
how it is adjusted with the journal entry or manual adjustments. This
guide does not give steps for doing this kind of IC eliminations.

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Consolidation Business Process Flows:

SAP BPC NW 10.0 Out of the Box Consolidation Functions

Step Consolidation SAP BPC Consolidation Function s
# Process
1 Data Collection Collect FX (Currency ) Rate
Collect GL Data
2 Data Preparation Collect FX (Currency ) Rate
Collect GL Data
3 Consolidation Intercompany Elimination

4 Report Cash Flow
P&L
Balance Sheet

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Consolidation (IC Elimination) Building Blocks:

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Consolidation (IC Elimination) Implementation Steps:

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Consolidation (IC Elimination) Implementation:

SAP EPM/BPC Project Lead/Manager/Architect
/Architect SAP HANA/EPM/BI/EIM Community Thought Leader
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Consolidation Building Blocks:

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Data Preparation:

Entity dimension
The following is the hierarchy view of the entities needed for the scenario I. The
elimination entity “AP_ELIM” is used to post the elimination balance. The
property ELIM for this entity should have the flag ‘Y’. The other needed entities
are grouped under Asia Pacific, the first common parent.

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INTCO dimension
The Intercompany dimension looks should have the trading partner information
as follows.

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Account dimension

In the account dimension, the following accounts are added for the IC
Elimination process. The property ELIMACC should have the valid
account ids to be processed for the IC Elimination.

For BS Account

INT121-INTCO RECEIVABLE (BS Account)
INT222-INTCO PAYABLE (BS Account)
ELIM_ADJUST_B

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For P&L Account

PL021- INTCO SALES (P& L Account)
PL111-INTCO COST (P & L Account)
ELIM_ADJUST_P

Datasource dimension:

The data source ids “Input” and “IC” are used for the process.

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Solution Building Blocks:

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Models needed:

o IC_Elimination - Finance type model and the data entry
mode is of year-to-date.
o Rates – Standard reference model to store the exchanges
rates.

Dimensions needed:

The model IC_Elimination uses the following dimensions
(minimum required properties and dimensions are used to keep
it simple)

The model Rates uses the following dimensions (minimum
required properties and dimensions are used to keep it simple)

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Data Manager Packages:

The following standard DM packages are used with no
customization.

1. FX Restatement – for currency translation
2. IC_ELIMINATION – To process the IC Elimination records
and to generate the records to be posted.

Business Rules

1. Currency Translation Business Rule for rate types.
2. ICELIMINATION Business Rule

Logic Scripts:

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1. An FXTRANS.LGF logic file for currency translation, will
translate into a reporting currency that is selected at run
time.
2. USELIMFORCLONE.LGF for processing the IC elimination
process.

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Implementation:

Step # 1 : Create and Populate Dimensions & Model

1. Log into Web Admin Client using Primary Admin account (or
any account with necessary task profile access that can create
Model/Dimension and other building blocks)

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2. Click on “Planning and Consolidation Administration” option at
the lower right corner.

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3. Create all the dimensions under Dimensions tab.

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4. Create the Financial IC Elimination model with the following
structure.

Note: Rate Model – IFP_Rates is referenced in this model.

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Step # 2: Set up Business Rules

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1. Click Administration tab/Rules/Business Rules and choose the
model (USElimination) as follows.

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2. Add the following 2 rule types by clicking “Add/Remove rule
Types”

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3. Click on the currency Translation and add the following 2 rules
for the translation. The contents for the AVG & CLO are also
given below.

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4. Enter the following rule for the elimination id CLONE001. All the
records with source type of “Input” will be chosen for the
elimination process. The records will be posted to the
destination source “IC”.

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Step #3: Set up Logic Scripts

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1. Click Administration tab/Rules/Logic Scripts and choose the
model (USElimination) as follows.

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2. Create the following scripts and the contents of the scripts are
given below.

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Step # 4: Set ups in the Excel Interface of the EPM add-in
(Data Manager Package).

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1. Go to the Start page of the Planning and Consolidation main
page and click the EPM Office Add-in Excel at the right side
under the Launch tab
tab.

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2. It opens up the EPM connection manager and prompts to
choose the connection as follows.

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3. Double click the model that you have created for the IC
Elimination (Click on IC_Elimination).

4. In the following screen, click Data Manager Tab. Then click
“Organize”,”Organize package list” to go the package
maintenance Screen.

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5. Click “Package” at the top left corner, then click “Add a
package”.

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Then press “select”, to select the process chain in the above
screen. Task type can be either user package and/or admin
package.

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6. Select the process chain /cpmb/IC_ELIMINATION under the
script logic, then press okay.

7. Now name the package as follows and then press Add to add
the package.

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Step # 5: Set ups in the Excel Interface of the EPM add
add-in
(Data Input Form and Reports
Reports).

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8. The following input schedule is used for collecting the data
and to do the currency calculation.

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9. Using the report editor, create the following input schedule to
load the data for the IC Elimination model.

Actual
No Scope
Jan 2012
Year To Date

IC
Input ELIM
Local
Curre US US
ncy Dollar Dollar
China-Input I_SIN LOAN
INT121 - INTCOREC 100 24.3
PL021 - INTCOSALES 100 24.3
India I_SIN CMAT INT222 - INTCOPAY 200 6.6
PL111 - INTCOCOST 200 6.6
I_JPN LAPTOP INT222 - INTCOPAY 300 9.9
Singapore I_CHINA_INPUT LOAN INT222 - INTCOPAY 100 88.7
I_IND CMAT INT121 - INTCOREC 200 177.4
Japan I_IND LAPTOP INT121 - INTCOREC 300 13.5
AP
Elimination I_CHINA_INPUT LOAN INT222 - INTCOPAY
PL111 - INTCOCOST
ELIM_ADJUST_B -
Elimination Adjustment - B

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ELIM_ADJUST_P -
Elimination Adjustment - P
I_IND LAPTOP INT121 - INTCOREC
PL021 - INTCOSALES
ELIM_ADJUST_B -
ELIM_ADJUST_P -
CMAT INT121 - INTCOREC
PL021 - INTCOSALES
ELIM_ADJUST_B -
ELIM_ADJUST_P -
I_SIN LOAN INT121 - INTCOREC
PL021 - INTCOSALES
ELIM_ADJUST_B -
ELIM_ADJUST_P -
CMAT INT222 - INTCOPAY
PL111 - INTCOCOST
ELIM_ADJUST_B -
ELIM_ADJUST_P -
I_JPN LAPTOP INT222 - INTCOPAY
PL111 - INTCOCOST
ELIM_ADJUST_B -

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ELIM_ADJUST_P -

10. Now run the IC Elimination package “IC_ELIMINATION” by
choosing Data Manager Tab/ Run package option. After the
successful execution of the pacakge, refresh the screen. The
report looks as follows.
Actual
No Scope
Jan 2012
Year To Date

IC
Input ELIM
Local
Curre US US
ncy Dollar Dollar
China-Input I_SIN LOAN
INT121 - INTCOREC 100 24.3
India I_SIN CMAT INT222 - INTCOPAY 200 6.6
I_JPN LAPTOP INT222 - INTCOPAY 300 9.9
Singapore I_CHINA_INPUT LOAN INT222 - INTCOPAY 100 88.7
I_IND CMAT INT121 - INTCOREC 200 177.4
Japan I_IND LAPTOP INT121 - INTCOREC 300 13.5

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AP
Elimination I_CHINA_INPUT LOAN INT222 - INTCOPAY -88.7
PL111 - INTCOCOST -88.7
ELIM_ADJUST_B -
Elimination Adjustment - B -88.7
ELIM_ADJUST_P -
Elimination Adjustment - P 88.7
I_IND LAPTOP INT121 - INTCOREC -13.5
PL021 - INTCOSALES -13.5
ELIM_ADJUST_B -
Elimination Adjustment - B 13.5
ELIM_ADJUST_P -
Elimination Adjustment - P -13.5
CMAT INT121 - INTCOREC -177.4
ELIM_ADJUST_B -
ELIM_ADJUST_P -
I_SIN LOAN INT121 - INTCOREC -24.3
ELIM_ADJUST_B -
ELIM_ADJUST_P -
CMAT INT222 - INTCOPAY -6.6
ELIM_ADJUST_B -

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ELIM_ADJUST_P -
Elimination Adjustment - P 6.6
I_JPN LAPTOP INT222 - INTCOPAY -9.9
ELIM_ADJUST_B -

Step # 6: Setup Consolidation Business Process Flows:

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1. Create a Process Template called “Consolidation Function” with
the following activities.

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2. Create the following Process Instance for the above activities.

3. Deploy the process template.

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4. Go to Home/Activities section, choose the consolidation
function and run the activities.

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5. For the collection of currency rates, the following EPM add-in
Excel opens up with the input schedule for entering the
currency rates.

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6. The following opens up when the activity of Currency
conversion is chosen to run.

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7. The status of the activities is shown as follows.

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8. The following screen is displayed for running the IC Elimination
process.

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9. After running the IC Elimination process, the log files are
viewed as follows.

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Step # 7 : Setup Consolidation Monitors

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1. Go to Home tab and click Consolidation Central and
Consolidation Monitor. Set the Context for the consolidation
model at the top of the panel.

2. Now we can run the Currency Translation and consolidation
process for the given context. The following shows the successful
run of the currency calculation.

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Appendix:

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Log File – IC Elimination Run

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Log File – Currency Calculation

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Disclaimer:
This description is a preliminary version and not subject to a license agreement or any
other agreement with SAP®. This document contains only intended strategies,
developments, and functionalities of the SAP product and is not intended to be binding
upon SAP to any particular course of business, product strategy, and/or development.
Please note that this preview is subject to change and may be changed by SAP at any
time without notice.

SAP assumes no responsibility for errors or omissions in this document. SAP does not
warrant the accuracy or completeness of the information, text, graphics, links, or other
items contained within this material. This preview is provided without a warranty of any
kind, either express or implied, including but not limited to the implied warranties of
merchantability, fitness for a particular purpose, or non-infringement.

SAP shall have no liability for damages of any kind including without limitation direct,
special, indirect, or consequential damages that may result from the use of these
materials. This limitation shall not apply in cases of intent or gross negligence. The
statutory liability for personal injury and defective products is not affected.
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SAP Community Contributors:

SAP EPM/BPC Project Lead/Manager /Architect SAP HANA/EPM/BI/EIM Community Thought Leader
SAP EPM Community Member SAP BPC/BOBJ/BI/MDM Community Domain Champion

Contact Us For:
IC Eliminations
Ownership Calculations
Consolidation Leading Practices and Design Advisory
Minority Interest and Equity Calculations, and Much More …

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