Elimination of Divested Company

[Former Member]

Dear Experts,

I have a situation where Company has already been divested in Period 12/2011. Before it being carried forward to period 1/2012, the user have performed all the necessary CG change in period 13/2011 & 14/2011. The balance of the company has shown a zero balance after the CG change and this can be confimed by checking the list of total records using reporting logic standard.

In order not to avoid any issue with the system/reporting, we have leave the Company A in the cons group but has indicated that the company has divested in period 12/2011 in the cons group master data

Next, when the user performed the IU elimination in period 1/2012, they noticed in the IU elimination log, system is still posting the elimination between Company A & others. It looks like 'as if' the company is still in the Group. However, when they checked the list of total records using standard reporting logic, there was no balance at all.

When the user checked the reporting logic none, they realized that the elimination entry that was shown as posted in the elimination log was indeed get posted to reporting logic 'none'. Now they realized that the system are eliminating based on value in reporting logic 'none'. The reporting logic 'none' are still showing some balance (not zero).

This has become an issue for them since the elimination log is showing unwanted transactions.

My question:

1. How do we zerorize the balance in reporting logic 'none' - think that this will avoid any elimination between Company A & other if company A has zero balance in reporting logic 'none'?

2. How can we avoid the system to eliminate Company A in period 1/2012 - if we do not manage to zerorize Company A in reporting logic 'none'?

3. How do we differenciate elimination log between transaction posted to reporting logic 'none' and 'standard'?

Note that our elimination method is using transaction currency and based on YTD.

I really appreciate your input on this matter.

Thanks.

Regards

Fauzi

[dan_sullivan · Accepted solution]

The cons group changes must be executed for the period of divestiture - 012/2011. It does not help to execute this for periods 013 adn 014 if that is not the period of divestiture. Other than this, there is no issue here other than understanding how BCS views the data with reporting modes.

1. The reporting mode none is for viewing all data without regard to the consolidation logic. However for the consolidated results the report mode should be standard. The BCS std logic reads the cons group master data and excludes records for cons units which have been divested in previous periods.

2. The only way to avoid the eliminations from occurring is to remove the cons unit from the hierarchy with parameters set to period 001/2012 or period 016/2011.

3. The logic for the log reads only the hierarchy and not the reporting mode logic.

[former_member209721]

Actually, the best practise is (in addition to what you've done) to "unassign" the divested company from the consolidation unit hierarchy in period 001 just before executing the Balance Carry Forward. That way, the system doesn't perform any posting for the divested company in the new year.

Even if you do it subsequently (because you forgot to do it), it is not a big issue : just use the "standard" reporting mode each time you execute a report (including the list of totals records). Indeed, in 99% of the cases, this is what needs to be done if you want to get the correct figures, i-e with the consolidation logic applied. The reporting mode "none" shall not be used when requesting the consolidated figures...

[former_member209721]

Oops sorry, I just answered to your question as the same time as Dan. sorry, if the answer is almost the same...

[Former Member]

Dear Dan/Collet,

Thanks for your reply. I will try to unassigned the company from the company and see what happened.

Anyway, based on my understanding (refer to 702649), if a company is divested from a Cons Group let's say in period 3/2012 -the company should not be removed from the hierarchy until the following fiscal year 1/2013. Giving this scenario, I believe, since the company still remains in the hierachy (from period 3/2012 to 12/2012), the elimination log will continue to show the elimination of the company (from period 3/2012 to 12/2012) even if the company has been divested from the Cons Group.

My issue with our current user is, they alway refer to the elimination log to see whether their numbers has been eliminated properly. The same reason would apply for the auditor. They would see whether numbers have been eliminated or necessary elimination rule has been put in place.

Is there a way to achive the elimination log that represents number within the Group (exclude those has been divested)? Our current user prefers the layout which show the Company A & B, and the log can be drill down to account balances.

Regards

Fauzi

[former_member209721]

The company must remain in the hierarchy in 2012 (in your example) only for the Income statement figures.

Regarding the elimination log, according to me, there should no be any elimination for the divested company after the divestiture period because the YTD amounts should be 0 after group changes execution (Posting level 22 used to set the balance to 0). So, if you have eliminations performed, that maybe means that the other companies keep on declaring IC data with the divested company...

[Former Member]

Dear Collet,

"Regarding the elimination log, according to me, there should no be any elimination for the divested company after the divestiture period because the YTD amounts should be 0 after group changes execution (Posting level 22 used to set the balance to 0)"

I tend to agree with you that there should not be any elimination after the divestiture after the YTD amount is 0. In my actual case above, I was expecting that the system should stop the elimination in period 1/2012 since the company has been divested in period 12/2011 and YTD amount is already 0. By not removing the company from hierarchy, I expect that there should not be elimination entries in the elimination log because the YTD amount is already 0. But that is not the case. The elimination is still continue and it is coming from the divested company since from the reporting logic 'none', the divested company still have some figures.

As Dan suggested earlier, the elimination log is dependent on hiearchy and if the reporting logic none still contains value - perhaps the elimination will continue even after the company has been divested.

Is my understanding correct? Thanks

Regards

Fauzi

[former_member209721]

Did you try to unassign the cons unit from de hierarchy ?

[dan_sullivan]

One thing that might work - I haven't tried myself - is to activate the validity periods on the cons unit characteristic in the data basis and then change the validity period for this cons unit to end 012/2012. It will be in the hierarchy but not visible in the monitor and therefore possible not in the log.