SAP(BPC) Legal & management consolidation

SAP Business Planning and Consolidation (BPC):

Legal & management consolidation

Consolidation capabilities that deliver a complete portfolio of financial results and an integrated business intelligence platform for financial and management reporting and analysis.

SAP BPC full suite of financial and management consolidation capabilities deliver a complete portfolio of financial results, and provides an integrated performance management platform for financial reporting, analysis and planning.

• Finance manages the process
• Prepare global and local financial consolidations
• Manage performance from a broader perspective with financial reporting and analysis
• Breakthrough Consolidation(Legal/Management) with SAP BPC performance management solutions
• Integrate easily with current and future IT environments

• Prepare and consolidate financial information in a centralized, controlled, compliant environment to ensure the end-to-end completion of the close process.
• Put finance users in control with self-service, automation and reporting and analysis functionality.
• Manage, control and certify financial statement reporting.
• Evaluate financial results with confidence and accuracy for multiple countries, currencies and legal entities, each with their own accounting policies intact.
• Support better planning and forecasting with reliable consolidated.

Finance manages the process

• Amend entities, organisational structures or account details with absolutely no coding, scripting, or complex language to create and test.
• Accommodate mergers, acquisitions or reorganisations with ease.
• Update structures and business rules once and see them reflected throughout the application automatically.
• Provide critical financial data for regulatory compliance reporting, including Sarbanes-Oxley (SOX), IFRS and multi-jurisdictional GAAP reporting.
• Meet the demands of management and get instant analysis any time during the close with more than 200 pre-configured, ready-to-use reports.
• Prepare and certify financial results that support the requirements of external and internal stakeholders.

Prepare global and local financial consolidations

• Collect and present financial data in multiple reporting and transaction currencies.
• Use standard reports, measurements and metrics for scorecarding, dashboards and adhoc analysis and financial reporting to deliver operational, management and financial information.
• Define critical success factors and link strategies to specific plans and metrics using embedded dashboards.
• Meet the requirements for consolidation reporting, financial reporting and management reporting—using a single solution.
• Process massive data volumes quickly and efficiently and allow access by large numbers of users, regardless of their location.
• Centralized database ensures efficient processing and administration, and a single, shared source of strategic data offers accessibility and speed, regardless of user location.
• Perform data entry, modeling and calculations with ease using the embedded Microsoft© Excel© interface enables easy data entry, modeling, calculation and reporting.
• Perform advanced formula calculations using YTD values, averages and multiple periods combining financial and non-financial metrics.
• Automate allocations between companies and accounts, as well as business dimensions.
• Ensure data consistency with a thorough validation process that readily reconciles data for accuracy and notifies you immediately of any inconsistencies.

Legal Consolidation

Legal Consolidation mean financial information based on the accounting standard US GAAP

It Gives the enterprise to report its financial data accurately, timely and consistently.

Key Points

• Data upload from subsidiaries' financial systems
• Currency translation
• Inter-company elimination
• Inter-company journal elimination
• Consolidation reports

SAP Note 1326320, which provides essential information about this starter kit including information on further documentation.

Legal consolidation Task

Currency Conversion,

Inter unit Elimination,

Consolidation of Investment

Legal Consolidation.
In consolidation, working with BPCNW version

1. Consolidation-( all the consolidation part)
2.Rate- ( all the currency conversions and Eliminations )
3.Ownership

Dimensions....

C_Acct (A) C_Category (C) C_Datasrc (D) Flow (S) Group (R) Entity (E) Intco (I) Time (T) R_Acct (A) InputCurrency(R) Groups(R) O_Acct (A)

Category© Entity (E) Account (A) Currency(R) Time(T) Intercompany(I) Sub Table(S) User defined(U) Data source(D)

1. Load the master data(Dimensions)
2.create the Applications.
3.Load the Appset and Application Parameters.
4.Customizing the Logic(We have the existing logic in BPC-BI use that Logic).
5. Reports are based on your Business request form Client Base.

Management Consolidation

A managerial consolidation may be Consider the several ways, but focuses on internal factors and may have a different entity structure than that of the Legal structure. Management reports are typically used at the end of any given reporting cycle (actual/budget/forecast etc) and allow 'management' to gauge the performance/review the data of their business.

Management consol depends on client definition and client practice in the data that they collect from the entities.

Strategic questions focus on long-term profitability, which is a result of consolidation

• Industry structure, i.e. market drivers such as bargaining power of customers/suppliers, threat of new entries/of substitutes

• Competitive differentiation, i.e. a company’s uniqueness regarding customers (products, services, pricing) and competitors (costs) .

With the deregulation of markets and increasing internationalization, the industry structure gains in importance when compared to competitive differentiation.

To succeed Management Consolidation of International Business , four competences have to be met:

• competitive competence

A company indicates a high competitive competence when it copes with the rules of the market place better than any other competitor. Key performance indicators are productivity per employee and market capitalization.

• financial competence

High competitive competence is not sufficient, though, to shape a process of industry consolidation. In addition, financial competence is needed to raise funds, e.g. for takeovers. Key performance indicators are earnings before interest and tax (EBIT), equity, return on equity (RoE), gearing and the structure of investors (in order to raise additional funds).

• internationalization competence

As consolidation today refers either to a multinational trade region (EU, NAFTA, APEC, etc.) or a globally driven environment, a company has to assess its preconditions for a successful internationalization process. Key performance indicators are the existing foreign business and the management board’s international expertise.

• change competence

Consolidation usually imposes heavy reorganization upon a company (due to new business models, rapid internal growth, and/or merger and acquisitions). It is therefore vital to identify reorganization needs in time and to successfully drive the reorganization process. Key performance indicators are the number and size of successfully completed reorganizations.

The consolidation index serves as a management tool:

• to identify a company’s position in a consolidating environment and

• to assess a company’s strategy in the light of a larger consolidation process.

This Management Consolidation leads to the following questions:

European banking Industires

• Which banks have the potential to drive the consolidation process in the European market?

• How may incumbents be able to achieve a generalist position in the European market?

• How will the German banks and their home market be affected by the European market consolidation?

Under consideration are the ten European as well as the three leading German banks. The consolidation competences have been specified as follows:

• competitive competence

revenues per employee and market capitalization

• financial competence

earnings before tax, return on equity (RoE before tax), and tier I capital⁷

• internationalization competence

share of “non-home market” revenues and “non-domestic board” representation

• change competence

size and number of reorganizations and integrations within the last ten years

Based on a rating scheme from 1 (low) to 5 (high) for all four consolidation competences. The results have been plotted in a matrix of competitive/financial competence and internationalization/change competence.

The questions arising here are as follows:

European utilities industry

• Which utility companies have the competencies to drive the consolidation process?

• Are the current market definitions of integrated gas/power companies still valid in this process or do oil/gas companies have to be included as competitors?

• Competitive competence

revenues, EBIT per employee, market capitalization and access to energy resources;

• financial competence

earnings before interest and tax (EBIT), free cash flow (FCF), equity, return on equity (RoE before tax), and net debt/free cash flow;

• internationalization competence

share of revenues outside the home market;

• change competence

size and number of reorganizations and integrations within the last three years.

Over all Every Industry follows their own subsidies and Process of Management Consolidation Process