Please find belo described the informmation on business area consolidation.
In the SAP system, business areas portray an externally oriented dimension of a group's areas of operation. They can be the centerpoint of business reporting and, therefore, be an important medium for the groupu2019s public relations. The level of detail for portraying business areas will vary from group to group. When examining business reports you infrequently find more than 5 to 10 fields of operation. Though, for purposes of internal observation it may be very useful to classify the areas even further.
The consolidation of business areas described here offers the following functions:
Group-wide, cross-company code and cross-system consolidation
Data input from external, non-SAP systems
All types of currency translation methods
Elimination of intercompany u2018sales of merchandiseu2019 and u2018payables/receivablesu2019
Reclassifications from heterogeneous charts of accounts and key structures
Company-level cross-validations of the consolidated financial statement
The following sections will first discuss the organizational units "business area" and "consolidation business area", then financial statement presentation in Reporting, and finally the use of business areas and u2018trading partner business areasu2019 in various business transactions.
Org unit: Buiness Area and Consolidated Business Area-
In the u2018Enterprise Structureu2019 Implementation Guide, business areas and consolidation business areas are defined as organizational units. Consolidation business areas are organizational units formed for a fixed area of activity or responsibility within a group. For business area consolidation, you need to assign business areas to consolidation business areas. You can summarize data by defining an N:1 relationship (refer to u2018Segment Reportingu2019 in Business Reporting). However, if you require variable u2018subgroup creationu2019 down to the detail level in Consolidation, you will need to retain the same level of detail in the assignments.
Financial Statement Presentation in Reporting-
The degree of desired business area reporting is mostly determined by the procedure that is applied. On the one hand, minimum requirements for reporting on business areas are determined by laws of incorporation and regulations for stock exchange listing that vary from one country to another. On the other hand, internal requirements also determine the degree and content of reporting.
Three typical requirements are described below to help you decide which procedure to use.
Net sales by operating area
The simplest form of business area reporting merely portrays net sales - but without IC sales of merchandise - by business area (= operating area). This requirement has been anchored in EC law (4th directive), so that it is taken into consideration in the individual financial statement as well as the consolidated financial statement.
A complete income statement for a business area u2014 using either period costing or the cost of sales method u2014 is one of the most frequent requirements. The FI reporting tools can accomplish this representation if the business area being considered applies to a single company code.
More functionality is needed if, on the other hand, a business area is distributed among multiple company codes, or even among multiple systems within the group. In this case you would need to eliminate, in particular, business transactions which are business area-internal but also span company codes.
You can make the business area a required entry in the field status definition of the G/L accounts. With respect to the automatic generation of postings, the determination of business areas is discussed in a later section.
Balance sheet and income statement
As with the income statement above, internal business area balance sheets can be generated using tools in the Financial Accounting system FI, if the business area belongs to a single company code. Please refer to the corresponding FI documentation for the procedural steps.
A cross-company code business area balance sheet requires additional eliminations (e.g. payables/receivables) which are supported in consolidation. In addition to those items described for the income statement, the aspects listed below must also be taken into account for consolidated business area balance sheets:
Payables and Receivables: These are typically managed as u2018open itemsu2019 in the subsidiary accounting systems for customers and vendors. From a practical standpoint, however, you do not always want to separate invoices from/to external companies if these invoices refer to multiple business areas and if you do not have to assign the business areas to be debited when settling the open items. Payment media, dunning notices and statements of account would then be unwieldy by all the (internal) details which are irrelevant for the external trading partner. For this reason, the open item file without the business area is periodically broken down among the business areas of the offsetting entries. In addition to the customer and vender reconciliation accounts, the FI account determination provides parallel balance sheet accounts for direct posting. The batch data transfer program reverses the receivables and payables on these accounts using business area u2018blanku2019 and re-posts them with the u2018correctu2019 business areas of the offsetting entries into the original documents. The new receivables and payables are broken down for each new key date.
Liability and Shareholder Equity Accounts: While tangible fixed assets and, sometimes, current assets can be assigned to business areas relatively clearly, this is not necessarily the case with shares of affiliated companies and shareholder equity. It may be necessary to make manual assignments using postings in FI or later in Consolidation.
Taxes: Automatically generated tax entries are always coded with business area u2018blank.u2019 These entries are also broken down afterwards in the batch data transfer program already mentioned.
In general, for a business area balance sheet you will want determine for which balance sheet accounts the business area entry will be required for the operator, and on which accounts you want to postpone the manual breakdown of the business area u2018blanku2019 among the u2018correctu2019 business areas up to the financial statement reporting date. For receivables and payables as well as taxes, you can have the system transfer the business area u2018blanku2019 to the appropriate business areas. Other balance sheet accounts must be adjusted manually for business areas.
Business Area and Partner Business Area Assignments-
Before business area consolidation can take place, you need to have manually assigned business areas and partner business areas during various posting procedures.
Partner business area assignments
Receivables and payables as well as revenue and expense within the scope of the group are eliminated on the basis of trading partner assignments. The term u2018trading partneru2019 has already been discussed in the consolidation of companies. The term u2018partner business areau2019 is used in the same sense in Business Area Consolidation. Every posting line of a group-internal, cross-company code or cross-business area business transaction therefore includes both the u2018assignedu2019 company code and business area as well as the respective trading partner combination. Both combinations also differentiate the debit/credit totals ledger, the data of which is transferred to Consolidation. Elimination documents are then created there for each occurrence of the combination, and in Reporting you can generate an eliminated representation within u2018subgroup creation.u2019 Within business area consolidation, subgroups are typically composed of all consolidation units within one consolidated business area.
Hope this helps you. Please assign points.