Sapbpc nw 10.0 consolidations ownership and minority interest calculations v2

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SAP BPC NW 10.0 Knowledgebase

Consolidation on Investment Implementation Guide
 Ownership and Minority Calculation Implementation Guide, including
 Consolidation Central (an out of the box powerful feature of BPC)
- Consolidation Monitor
- Controls Monitor
- Journal
- Ownership Manager

A SAP EPM Community Service

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
i. Business Scenario: .............................................................................................. 3
ii. Overview: ............................................................................................................... 3
iii. Implementation Steps: ....................................................................................... 12
iv. Create and Populate Dimensions & Model: ................................................... 12
v. Data preparation:................................................................................................ 17
vi. Business Rules for Ownership Calculations: ................................................. 18
vii. Business Rules for consolidation:.................................................................... 20
viii. Logic Scripts:....................................................................................................... 27
ix. Data Input/ Reports: ........................................................................................... 28
x. Data Manager Packages: ................................................................................. 28
xi. Consolidation Building Blocks: ......................................................................... 29
xii. Ownership Calculations .................................................................................... 33
xiii. Elimination of Ownership – Purchase Method using .................................... 33
xiv. Consolidation Monitor ........................................................................................ 33
xv. Controls Monitor ................................................................................................. 39
xvi. Journal ................................................................................................................. 48
xvii. Appendix: ............................................................................................................. 51
xviii. Ownership Calculations: ................................................................................... 51
xix. Key Financial Terms .......................................................................................... 64
xx. Disclaimer: ........................................................................................................... 65

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Business Scenario:

Any corporation may have many legal subsidiaries and not all of them
are wholly owned and managed by the holding companies. During a
financial year, there may be fair number of acquisitions creates a
tedious manual process to eliminate the ownership and book the
minority interest for the closing. So there is a need a of automate
process to take care of these ownership and to do minority
calculations.

Overview:

This document illustrates every necessary step that is required to set
up an Ownership and Consolidation on investment model in SAP
BPC NW 10.0. A typical Ownership Manager process will have the
following functionalities.

Hierarchies are used to keep track of the parent-child
relationships.
The ownership model is used to store the ownership data.
The method definitions are configured in the business tables.
The method assignments are stored in the ownership model

In this guide, we will be looking at the following topics using the
purchase consolidation method.
1. Ownership Calculations
2. Elimination of Investment
3. Elimination of Equity
4. Minority Interest Booking

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SAP BPC Consolidation Solutions Overview:

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Implementation Steps:

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 following dimensions for the Ownership Model.

4. The account dimension members are as follows.

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5. Create the following ownership model. There should not be
any intercompany member and “I_NONE” is selected. The
values in the PARENT_GROUP property will be used to
form the ownership hierarchy for the ownership manager.

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6. Create the following dimensions for Legal Consolidation
model.

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Data preparation:

1. Go to EPM add-in excel and create the following input schedule
to enter data for the percent ownership and percent control.

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Business Rules for Ownership Calculations:

1. Go to Administration/Business Rules, click on “Methods”.

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2. Enter the following data for the method table. The share range
and the percent consolidation are used in the system to
propose the method of calculation.

Note: 0.75<,<=1.00 is interpreted as Greater than .75 but less
than or equal to 1.00.

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Business Rules for consolidation:

1. Now click on Method Based Multipliers and create the rule
RULE10 with the following values.

a. This rule will be used to select entities with method code
assignments of 86 and intercompany members with any
(99) method code.

b. 100% (1) of the source value will be written to the ALL
account specified in the eliminations and adjustments
business rule.
c. The POWN % of the source value will be written to the
Group account specified in the eliminations and
adjustments business rule.
d. The 1-POWN % of the source value will be written to the
Minority account specified in the eliminations and
adjustments business rule.

Note: The ALL formula will reverse the sign of the source
values while the Group and Minority formulas will not.

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2. Create the RULE60, method-based multiplier as follows.

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3. Choose Elimination and adjustments for the consolidation
model as follows.

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4. Create ELIMINVEST rule id and fill in the data for both General
& details as follows.

Choose RULE60 from Method-Based Multiplier. The source and
destination accounts are same.

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5. Create ELIMEQTY rule id and fill in the data for both General &
details as follows.

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Choose RULE10 from the multiplier and the source and destination
accounts are added as given below.

6. Create ELIMMRTY rule id and fill in the data as given below for
both General and Detail tabs

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Choose RULE 10 for the multiplier and assign source account and
destination to minority as given below.

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Logic Scripts:
1. The following standard logic script is called from the Data
Manager package. This has both currency translation and
consolidation scripts.
// Currency Conversion
*RUN_PROGRAM CURR_CONVERSION
CATEGORY = %O_CATEGORY_SET%
GROUP=%SCOPE_SET%
TID_RA = %TIME_SET%
RATEENTITY = GLOBAL
*ENDRUN_PROGRAM

// Consolidation
*RUN_PROGRAM CONSOLIDATION
CATEGORY = %O_CATEGORY_SET%
GROUP=%SCOPE_SET%
TID_RA = %TIME_SET%
*ENDRUN_PROGRAM

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Data Input/ Reports:

1. The input form used for the investment elimination calculation is
as follows.

Data Manager Packages:

The process chain used for legal consolidation is

/CPMB/LEGAL_CONSOLIDATION

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Consolidation Building Blocks:

Consolidation Central

This module enables to generate and manage consolidated data.
This is an all-in-one web interface for accountants. This gives an
accurate view of the status of collected and consolidated data of an
organization and is also a unified environment to perform
consolidation tasks over the web. It is available under HOME tab has
the following functions.

Consolidation Monitor

It‟s a workspace for monitoring the consolidation progress for a
specific consolidation scope for a given category, period, group or
subgroup.

The Consolidation Monitor displays the Group/Entity hierarchy
created in the Ownership Manager for Consolidation type models.

In the consolidation monitor we can see the status of the following.

 Controls Status
 Work Status
 Currency Translation status
 Consolidation status

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Controls Monitor

This is the place where user defined checks are performed to make
sure the data entry or at subsequent points in the consolidation
process to help ensure completeness and accuracy of the data. This
is mainly used to control the consistency of the financial data, for
example the balance sheet is balanced or not.

Journals

Journals work spaces are to record and make adjustments to data in
the database. This is typically done as part of the month-end or
quarter-end process. For example, administrators load general ledger
information into a model using the Data Manager. Before the close,
line managers can review the data and make adjustments as
necessary using a journal entry.

Journals Workspace Features:

• List journal IDs
• Select journals based on your context or advanced search criteria
• Select columns to display

Ownership Manager
The Ownership Manager in the Consolidation Central module
enables you to create and manage ownership-based hierarchies
used for performing statutory consolidation.

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Ownership calculations are run from the ownership manager.

An ownership based hierarchy combines Group and Entity members,
where entities can be assigned to groups by Category and Time.
Groups are nodes and entities are base level members. We define
ownership based hierarchies in the system to set up and report on
entity hierarchies that cannot be managed by a dimensional
hierarchy.

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In the above example, USA is the holding company, the percent of
ownership is 100% and it owns 70% of Australia. Australia owns 60%
of China.

Security
The following tasks required for the consolidation processes.

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Ownership Calculations

The ownership calculations specify a parent entity‟s ownership
interest in its subsidiaries, and the consolidation rates and methods to
be applied. The steps followed for each ownership calculation
process is explained in the appendix under “Ownership Calculations”.

Elimination of Ownership – Purchase Method using
Consolidation Monitor

1. Log into EPM Add-in excel to enter data for the consolidation
model using the following input form.
In this guide we will address the consolidation of investment
income for the following items using the purchase method.

a. USA invests $80,000
b. Australia‟s stock purchase is 20,000
c. China‟s stock purchase is 30,000
d. The minority interest will be booked.

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2. Go to Home Tab, click consolidation central then click
consolidation monitor.

3. Select the model at the right top corner and the context at the
top of the screen as follows.

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4. To run the consolidation process, highlight the corporate level
group (World) and press consolidate.

5. In the following pop up window, make sure the context is
correct and then select the option of Incremental or Full
consolidation as follows. The incremental option is chosen
whenever the entity‟s transaction data is most recent than the
last consolidation process. Then press okay in the pop up
window.

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6. The following screen pops up when the process starts running.
It shows the currency translation runs as first part of the
consolidation, then the consolidation runs.

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7. After the successful completion of the consolidation, the status
should as follows.

8. Now log in back to the EPM Add-in Excel and refresh the
following input form. The report should display as given below.
So what we learn from this is as follows.

a. The investment of USA (80,000) is adjusted to
0.
b. The stock purchase of Australia is adjusted to
0
c. The stock purchase of China is also adjusted
to 0.
d. The minority interest for both Australia and
China are booked

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Controls Monitor

This process is used to identify if there is any inconsistency in the
financial data by defining some user checks. In the following steps,
we will see how to configure in checking if there is any in-balance of
total assets & total liability.

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1. Go to Administration tab, click Controls under Rules.

2. Enable the controls for a model by highlighting the model and
press Enable controls at the top. Then click Ok.

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3. Click New to create a new control and enter the following
details.

ID: Name of the control (BALANCE_CHECK)
Type: Blocking – must be passed before advancing to next work state.
Type: Warning – Can let to proceed with the next step in the work status.
Breakdown Dimensions: Two additional dimensions can be selected to balance
by.

4. The description, the tolerance Thresholds based on absolute
value or percentage are entered as follows.

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5. In the following screen the accounts are entered as follows to
compare the total assets and total liability.

BS100-Total Assets at the top part of the screen
BS200-Total Liability at the bottom of the screen.

6. If there is a need to display the input schedule or web report
when the control is executed, then the Documents section is
used as follows.

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7. After entering the above details, validate the control and save it.

8. Now go back to controls main menu and highlight the model,
and then hit Edit Sets.

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9. Create the new set (control_set1) as follows. Here use the Add
option to add the newly created control in the above steps.

10. Now the assignment of control is configured in Edit
Assignments tab from the controls main menu.

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11. In the following screen, choose the category and time for
which the control needs to be assigned. The control_set1 is
chosen by double clicking at the intersection of the category
(ACTUAL) & the time (2012.12) in the below screen.

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12. Now we are ready to run the controls. Go to Home, click
Consolidation central, and then click Controls Monitor.

13. Choose the model at the top right hand corner and set the
context at the top of the screen.

14. Highlight the higher level group (S_World) and click the
Run controls.

15. After successful run of the control, click the open control
results to see the failed items. The following screen should
display the „Failed‟ status as follows.

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16. Click on the failed controls to see detail error message as
follows.

17. Now click the line „Balance Check for Australia‟, the
screen should display the following details where it shows the
liability not equal to assets. Here the control failed for the
difference of $19,361

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18. We will adjust this amount by using a journal entry and
rerun the control in the next section.

Journal

1. From the Home tab on the Start Page, choose Planning and
Consolidation Administration → Features → Journals.

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2. Now highlight the model and click New to create a Journal
template as given in the following screen.

3. Save and close the template.

4. Access the Journal Landing Page for your Legal model.
a) From the Home tab n the Start Page, choose
Consolidation Central → Journals.
b) On the upper right, select your Legal model.

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5. Create new Journal Entry as given in the following screen.

6. Now go to the controls monitor and run the controls one more
time by clicking the Run controls. Here it shows the controls ran
successfully and it balanced on the liability and assets.

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Appendix:

Ownership Calculations:

1. Go to Consolidation Central in the home tab and click on
ownership manager as in the following screen.

2. Select the context in the top of the screen and click edit.

Category = Actual, TIME= 2012.12 and Group = S_WORLD
(Corporate)

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3. Click Add and select the holding and subsidiaries as follows.

4. Define the holding company by double clicking the current
consolidation method and choose “101 – Holding” in the drop
down list and save the model.

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5. Click the Calculate button at the top right corner and select the
direct share method in the pop window as in the following
screen. Then press okay.

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6. The following screen shows the generated values of percent
control and percent ownership by the direct share method as
entered in the input schedule in step #1 of data preparation
section.

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7. Now click calculate and choose group share method as follows.
Then Click okay.

8. Now the percent control and percent ownership are calculated
by the group share method option.

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The Group Share of China is 22% Percent Control since Australia
only has 55% control (.55 x .40 = .22).
The Group Share of China is 42% Percent Control since Australia
only has70% ownership (.70 x .60 = .42) .

9. Now overwrite the Percent Ownership – Current by using the
group share method as follows.

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10. In the following scree, the generated values are copied
into current percent of Ownership (POWN) since the overwrite
option was chosen.

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11. Now update the method Percent Consolidation and
Percent Ownership values using the Group Share Method.

12. The options selected in the above screen, updated 4
items as follows.

a. The Method for Australia is updated to Proportional since
its Percent Control falls between the range of .25 to .75
specified in the Methods above.
b. The Method for China is updated to Equity since it‟s
Percent Control falls between the range of .00 to .25

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c. The Percent Consolidation (PCON) for Australia is
updated to .75 since it‟s Percent Control falls between the
range of .25 to .75 specified in the Methods above.
d. The Percent Consolidation (PCON) for China is updated
to .25 since its Percent Control falls between the range of
.00 to .25 specified in the Methods above.

13. Now calculate the methods and percentages by choosing
direct share method as follows.

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14. Now the method and PCON are calculated based on the
direct share method.

a. The Method for C2000 is updated to Proportional since its
Percent Control falls between the range of .25 to .75
b. The Percent Consolidation for C2000 is updated to .75
since its Percent Control falls between the range of .25 to
.75 specified in the Methods above.

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15. Now calculate for Group shares only without any other
options as given below.

16. The output of the above option will change the
calculations as follows.

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17. Now we will test the option of calculating methods and the
percent of consolidation (PCON) based on the previous
calculation.

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18. In the below screen the method and PCON are updated
with the previous calculations.

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Key Financial Terms

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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.
________________________________________________
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
 IC Matching , IC Booking , Account Transformations , Carry Forward
 Consolidation Leading Practices and Design Advisory
 Minority Interest and Equity Calculations, and Much More …

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