Understanding Consolidation of Investment (COI) in SAP S/4HANA Finance for group reporting – part II

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This is part II of the blogpost series on Consolidation of Investment (COI) in SAP S/4HANA Finance for group reporting

In Part I we covered Consolidation of Investment (COI) in SAP S/4HANA Finance for group reporting solution for Activity based consolidation – direct share without cross holding scenario

Request you to refer part I of the blogpost first which can be accessed from below link

https://blogs.sap.com/2022/01/28/understanding-consolidation-of-investment-coi-in-sap-s-4hana-financ...

We have already covered below points in part I of the blogpost which you can refer from the link shared above

• Introduction to the concept of Consolidation of investment (COI)


• Different accounting techniques used for consolidation


• Introduction to Activity based consolidation in SAP S/4HANA Finance for group reporting


• Configuration and Fiori activities for COI in SAP S/4HANA Finance for group reporting


• Benefits and Limitation from SAP S/4HANA Finance for group reporting

In this blog post we will only explain and understand (COI) with cross holding with the help of below example

Scenario for period 01 (period 012.2019)

• In group PQR, Unit P is the Parent unit. Unit Q & Unit R are subsidiary units


• Unit P has 70 % holding in Unit Q via Purchase Method


• Unit Q has 30% holding in Unit R via Equity Method


• Since this is first period of consolidation the activity type will be 01- First consolidation


• We cover both Purchase and Equity method of consolidation

 

Below sample data was used for period 012.2019

Upload above transaction data with activity type, percentage holding and equity details and execute data monitor tasks (in the example we have loaded all the data in EUR hence CT task is not executed)

Below is the individual BS for each unit after executing Data monitor but before executing any of the Consolidation tasks. The calculation for net income can be verified against the manual BS screen shot shared above

We proceed to execute tasks in Consolidation monitor to elimination inter unit investments

a) Task 2060 – Preparation Consolidation Group Change

 

Refer below link from SAP help for more details on this task

https://help.sap.com/viewer/4ebf1502064b406c964b0911adfb3f01/2020.000/en-US/1cb4def471234e1ab0c039d2...

 

b) Task 2141 – Calculate Group share %

In Cross holding the % holding changes for subsidiary unit which is part of the cross holding. In this example:

Unit P is Parent unit holding 70% in Unit Q.

Unit Q is subsidiary of unit P but it holds 30% in Unit R.

Hence the group share of Unit R is 21 % which is 70 % of 30

Refer below link from SAP help for more details on this task

https://help.sap.com/viewer/4ebf1502064b406c964b0911adfb3f01/2020.000/en-US/79940df720e24c29b1569dda...

 

c) Task 2101 – Consolidation of Investment (Activity Based)

Details from log for Investment in Unit Q

 

Details from log for investment in Unit R

Refer below link from SAP help for more details on this task:

https://help.sap.com/viewer/4ebf1502064b406c964b0911adfb3f01/2020.000/en-US/9453a9b45c1a41f08f16924f...

The consolidated Balance sheet for Group PQR for period 12.2019 after First consolidation shows below values

Asset:

 

Liabilities:

 

Manual Calculation for consolidated BS as of 012.2019

Here first we prepared consolidated BS of Unit Q & R. Then we prepared final Consolidated Balance with unit P and Values from Cons BS of Unit Q & R

 

Scenario for period 02 (period 001.2020)

1. Subsequent consolidation


2. Step Acquisition

 

Before loading data in period 01.2020, we executed Balance carry forward to get opening balances for the period.

Trial balance for the sample data used for period 001.2020 and Manual BS as of 001.2020 after considering transaction for period 001.2020 is as below

Upload file had below values for the Step acquisition in Unit R

After uploading the data for period 01.2020 and completing all the steps from data monitor we get below information for Balance sheet for period 001.2020. This can be compared with the manual BS above

We executed Consolidation Monitor for period 001.2020 and below are the logs from different tasks

a) Task 2060 – Preparation for Cons Group Change

b) Task 2141 – Calculate Group Shares % (PL30)

c) Task 2101 – Consolidation of Investment (Activity based)

Details for Unit Q

Details for Unit R

Consolidated BS for group PQR as of period 001.2020 is as below

Assets

Liabilities:

Manual Calculation for consolidated BS as of 001.2020 is as below

 

Final note:

Like mentioned in part 1 of the blogpost, this is not an exhaustive list of scenarios however a small attempt to give some insight on how few different Consolidation of Investment scenarios can be achieved in SAP S/4HANA Finance for group reporting.