Related parties as consolidation unit

[Former Member]

Hi

In our scenario client wants some items be posted with information about Relaed Parties (RP) as well as Associated Companies (AC). AC's are created as consolidation unit (0Company) and are included in CoI. RP's are only for reporting purpose.

It depends on period if item is posted with RP or AC (only one is allowed), for exampl item Trade Receivables RP/AC. Now if item is posted with subbasignment Trading partner = AC it should be eliminated durring IU Elimination task. In addition client wants that RP or AC are required entry for such items. And of course in the future RP can became AC and vice versa.

The problem is how to create RP:

1) as consolidation unit (0Company) - without assigning to Consolidation Hierarchy, or

2) as new subbasignment.

For solution 1 we've got one characteristic so it's easy to create BDC with required entry and even with additional selection for values, but in other hand there ara about 50 not assigned values (numer of RP) for consolidation unit (0Company) and I'm not sure if this has negative influence for consolidation process.

For solution 2 we've got to separate characteristic so it's easy to menage changes when RP beacame AC but in other hand there is quite hard to make required entry for both subbasignments (we must create technical (fake) values for both characteristics to use when one is true value)

My question is if solution 1 is correct or better choose 2 ?

Or maybe there is other way - all comments are welcome

Thanks a lot and sorry for long post

regards,

Pawel

[Former Member · Accepted solution]

Hi Pawel,

I used to have such (RP) in the system according your variant # 1. It's very easy to include the company into eliminations or exclude from it -- for this I usually use a single selection on companies where all companies belonging to the Group and required eliminations are listed. In eliminations this single selection is used as a restriction criteria .

[Former Member]

Thanks Dan & Eugene

Dan You're right that chanching RP=>AC and AC=>RP can occurs problems with balances. What's more client is affraid about this but I don't know the answer.

In our case RP and AC has diffrent ID, so when AC is becoming RP than new ID value for RP is created and the same for RP when becomes AC. But the problem is how to provide reported data, because it's cumulative data.

For example in period 01 company A reported 100 with RP1. In period 02 RP1 became AC1 so in period 04 copmany A reported 250 with AC1 (but 100 is for RP1 and should not be eliminated). Question is how does it work - BCS know that 100 is for RP1 or company A should divide balance for 100 with RP1 and 150 with AC1 ?

For that issue I've opened new thread "Related parties balance"

regards,

Pawel

Edited by: Pawel Polanski on Sep 8, 2008 4:41 PM

[dan_sullivan]

Although I like Eugene's approach, the concern I have is when changing from RP to AC, the entire balance may be eliminated instead of only balances accumulating since becoming AC, which is what I consider the correct accounting. The same goes for changing from AC to RP, where any remaining balances may no longer be eliminated even though is was AC when opened and therefore should be eliminated.