SAP Business Planning and Consolidation (BPC)

SAP Business Planning and Consolidation (BPC):

Features include:
• Legal & management consolidation
• Currency conversion
• Inter-company eliminations
• Multi-tier allocations
• Journal entries
• Reports including P&L, Balance Sheet, Cash Flow, and Fixed Assets
• Standards-compliant including IAS, IFRS, FASB, GAAP
• Sarbanes-Oxley compliance
• Logic
• Reports

Most reports in BOP (Business Object Planning) can be replicated exactly in BPC using EVDRE and EVGET functions. Other reports may require some modification in format in layout - however to date, we have not found any reports that cannot be replicated. Input schedules - A key design issue relates to how workbooks can be replicated in BPC. BOP uses the concept of SPM's which provide a powerful way to create variable length input sheets and flexibility. To a large extent, spread rules can be replicated using BPC's Spread data option. BPC provides variable length input sheets using its EVDRE formula. Workflow - BPC uses more sophisticated workflow than BPC - BOP's workflow can be replicated and then enhanced in BPC. Non-validated dimensions - BPC has no concept of non-validated dimensions, i.e. all dimensions must be validated. Therefore the data form design requires to be amended to allow for this type of functionality.

SAP BPC's consolidation features in greater depth:

Currency conversion
SAP BPC enables multinational companies with global entities and subsidiaries to easily – and in real-time – calculate currency exchange rates and perform conversions for any number of denominations. With SAP BPC, converting your data from Euros to Dollars to Pesos takes seconds, not hours.

Inter-company eliminations
Understanding transactions from an inter-company perspective is vital to the integrity of your consolidated statements. This may result in the elimination or re-allocation of any number of your inter-company transactions. SAP BPC provides the tools you need to automate this normally time-consuming process, easily adjusting to the frequency, duration, and amounts of your custom-defined elimination requirements.

Journal entries
Manual and automated adjustments are an integral part of the periodic financial close process in today’s complex consolidation and reporting environment. SAP BPC provides complete support for flexible journal entry, reporting and tracking to meet your complex consolidation requirements.

Unified financial & management reporting
With SAP BPC, certifying your financial (and even operational) performance is now easier than ever. SAP BPC provides any number of standard and custom report templates enabling users to self-generate their reports quickly and easily—without IT or administrator assistance. A full spectrum of report types is available including P&L, Ebitda, Balance Sheet, Cash Flow, Equity, and Fixed Assets.

Complex ownership structures
Multinational enterprises face a unique set of consolidation and reporting challenges due to their oft-complex ownership structures. SAP BPC effectively addresses these challenges by providing the ability to report multiple ownership entities by time period, as well as the ability to make automatic adjustments for multiple ownership consolidation methods.

Multi-tier allocations
In order to ensure the accuracy of your financial information, you may need to allocate numbers throughout and across your organization. For example, you may need to re-distribute certain manufacturing costs to R&D. With built-in financial intelligence, SAP BPC can dynamically manage any type, number or measure of allocation.

Data integration (ETL)
With built in data integration and management capabilities (ETL), SAP BPC allows you to tap virtually any data source to access, capture and map your actuals data. Typical data sources leveraged by SAP BPC customers include: General ledger systems such as JD Edwards, Great Plains, and others; ERP systems such as SAP, Oracle, and PeopleSoft; transactional data from CRM, SCM, and other systems; and data from spreadsheets and other financial management products.

Compliance & Sarbanes-Oxley
SAP BPC provides an effective, secure process framework that ensures the highest level of accuracy, reliability, and consistency throughout the whole of your performance process—from budgeting and forecasting through financial close and reporting. Industry experts such as Gartner contends that performance software—like that from SAP BPC—can help in meeting the stringent requirements as set forth by Sarbanes-Oxley including report certification, process control, and faster reporting cycles.

SAP BPC: A comprehensive consolidation solution
Thousands of business users rely on SAP BPC every day to manage their most critical financial consolidation and reporting requirements. Key benefits and features of SAP BPC include the following:
• Unifies consolidated results on both a legal and management basis
• Shaves days and weeks from the financial close process
• Enables regulatory compliance such as Sarbanes-Oxley
• Provides a single, centralized view of operational and financial performance data
• Consolidates data in real-time from any number of general ledger systems and charts-of-account tables—creating a single COA structure
• Provides clear, transparent financial statements and reporting including P&L, cash flows, and balance sheets
• Compares budget-to-actuals data from a single application including assets, liabilities, revenues and expenses
• Automates the inter-company elimination process, providing clear transparency into corporate transactions at all levels
• Manages any number of currencies, performing conversions, allocations and eliminations as needed; supports currency triangulation
• Patented Microsoft Excel integration for intuitive data management and reporting
• Supports all reporting standards including GAAP, FASB, IAS

GAAP

Generally Accepted Accounting Principles (GAAP)

The term "GAAP" is an abbreviation for Generally Accepted Accounting Principles (GAAP). GAAP is a codification of how CPA firms and corporations prepare and present their business income and expense, assets and liabilities on their financial statements. GAAP is not a single accounting rule, but rather the aggregate of many rules on how to account for various transactions.

When preparing financial statements prepared using GAAP, most American corporations and other business entities use the many rules of how to report business transactions based upon the various GAAP rules. This provides for consistency in the reporting of companies and businesses so that financial analysis, Banks, Shareholders and the SEC can have all reporting companies preparing their financial statements using the same rules and reporting procedures.

The rules and procedures for reporting under GAAP are complex and have developed over a long period of time. Currently there are more than 150 "pronouncements" as to how to account for different types of transactions, ranging from how to report regular income from the sale of goods, and its related inventory values, to accounting for incentive stock option distributions. By using consistent principles, all companies reporting under GAAP report these transactions on their financial statements in a consistent manner.
The various rules and pronouncements come from the Financial Accounting Standards Board (FASB) which is a non-profit organization that the accounting profession has created to promulgate the rules of GAAP reporting and to amend the rules of GAAP reporting as occasion requires. The more recent pronouncements come as Statements of the Financial Accounting Board (SFAS). Changes in the GAAP rules can carry tremendous impact upon American business. For example, when FASB stopped requiring banks to mark their assets (loans) to the lower of cost or market (i.e. value of a foreclosed home loan). the effect on a bank's "net worth" as defined by GAAP can change dramatically. While generally neutral, there is some pressure on the FASB to yield to industry or political pressure when it makes its rules.
GAAP is slowly being phased out in favor of the International Accounting Standards as the global business becomes more pervasive. GAAP applies only to United States financial reporting and thus an American company reporting under GAAP might show different results if it was compared to a British company, that uses the International Standards. While there is tremendous similarity in between GAAP and the International Rules. the differences can lead a financial statement user to incorrectly believe that company A made more money than company B simply because they report using different rules. The move towards International Standards seeks to eliminate this kind of disparity.

Consolidation Factors

Consolidation Factors

The element of corporate combination which have been identified as likely contributors to a net increase in market value may be categorized as either

"Operating" or "finacial”.

On the operating list would be counted the following:

1) Opportunities for economics of sales or other direct effciences in manfactring:

2) the enchanmcent of competivitate sales positions through augmented monopoly power or the appeal of more

complete product line:

3) a complementarrity in research and basic technological expertise relating to new products:

4)A convenient fit of scarce managerial skill leading to greater administartive effiency.

It seems unarguable that if indeed one or more of these conditions is present in the joining of two enterpries ,

the aggregate profitability of the two will rise ,as should the consequent market value of teh surviving firm.

on the other hand,there has been considerable skepticism expreseed in the literature as to the frequency with

which such benifits are accesible in practice.

1)Random Server Proliferation

2) Physical co-location of system

(Server and Sotrage)

3) Storage consolidation

"Legacy" consolidation of smaller applications

4) Like-workload Consolidation

5) Last and Bravest choice

Mixed workload consolidation

A financial statement which covers a holding company and its subsidiaries is called consolidated Finacial statement.

4.1Background on market power

4.2. Static market power analyses – effects of market concentration on prices and profits

4.3. Dynamic market power analyses – effects of M&As on prices and profits

4.4. The external market power effect

This study examined coping strategies and situational stressors as predictors of employee distress and turnover following an organizational consolidation. Six coping strategies were used: action planning, positive reinterpretation, acceptance, seeking emotional social support, intention to quit, and using alcohol or drugs. Two stressors, the extent to which a unit was affected by the consolidation and consolidation-related stress, were used. Two indicators of distress, mental distress and somatic complaints, were measured at three time periods: three months prior to, shortly after, and six months after the consolidation. The coping strategies were assessed three months prior to and in response to the consolidation. Findings indicated that intention ro quit and consolidation stress predicted mental distress while positive reinterpretation, use of alcohol or drugs and lower unit impact predicted somatic complaints shortly after the consolidation. Six months later, the main predictor of mental distress and somatic complaints was use of alcohol and drugs Turnover best predicted by a pre-consolidation indicator of intent to quit and a post-consolidation indicator of lack of acceptance of the consolidation.

Ensure data integrity. Financial Consolidation allows you to decrease cycle time and improve accuracy by automating the loading, consolidation, and validation of data from multiple organizational units. It also determines the most efficient consolidation paths for you. Because the data and changes are consolidated in a central, secure database, you instantly arrive at a single version of the truth not easily attained using spreadsheets. The application also features built-in calculations for the accurate handling of currency conversions, group ownership, and variances.

Support compliance. Using Financial Consolidation's journal entry capabilities, you can adjust data for consolidation issues, regulatory reporting, and management requirements. The application automatically handles exchange gains and losses, and eliminates consolidation adjustments such as minority interests, joint ventures, intercompany eliminations, and allocations. It also allows you to control the percentage of subsidiaries and associate enterprises that are rolled up, and the rate at which it happens. Financial Consolidation provides a complete audit trail on all consolidation adjustments, allowing you to review changes and providing the transparency needed to satisfy internal and external auditors.

Bringing speed, accuracy, agility, transparency, and insight to the process, BPC Financial Consolidation simplifies the tasks associated with consolidation so finance leaders can spend more time analyzing results and guiding the business—leading to greater return on investment and low total cost of ownership.

Consolidation Factors in Business Planning

Consolidation Factors in Business Planning

organizations large and small have initiated or continued data center consolidation projects. Unlike some other IT initiatives, the benefits from this exercise are clear and well-documented, and include both economic and operations advantages. the unanticipated side effects of data center consolidation and consider a proactive strategy for mitigating those risks prior to completion of the product.

Risk Factor 1: Information Risk

Data center consolidation represents an incredible concentration of information on an infrastructure that’s highly accessible. Remember that not all data is created equal, with some being much more sensitive than others. However, because the economics of the new data center are so compelling, there is now a much broader variety of data within it. research, financial information, and intranet content, and you have terabytes of growing and disparate information all residing within the same data center. The capacity of the new data, along with the continued, rapid growth of information, challenges its ability to be effectively controlled.

Risk Factor 2: Asset Risk
Which assets contain the sensitive information? Great question, especially when we mix in server virtualization and storage area networks (SANs). The benefits of the afore-mentioned technologies are great, but it remains a challenge for most organizations to identify assets which contain some of the critical information we highlighted in Risk Factor 1. This is a major compliance challenge, as identification of critical assets is just as important as identifying the data which they contain.

Risk Factor 3: Access Risk

Organizations often have a vast array of not only authentication techniques, but also of authorization methods. Depending on their information, different assets might require different access methods, which may in turn be incongruous with other technologies in place. To overcome access challenges, numerous technologies are thrown at the problem. These include but are not limited to router access controls, virtual LANs, firewalls, single sign on (SSO), intrusion detection, etc. Whether the information is distributed, concentrated, or virtualized, getting the policy in place for managing access remains a challenge.

Risk Factor 4: Audit Risk

Aggravating these challenges are the ever-increasing audit requirements.It doesn’t matter whether you’re a privately held entity not controlled by the Sarbanes-Oxley Act, or if you just have sensitive information, you’re going to have to prove that you have the requisite controls in place and that they’re working. Even within a consolidated data center, collecting information is difficult, especially since audit information may have to be correlated with other information outside the data center. Activating specific auditing functionality within point products might not only result in large log files and trigger a number of events, but may in fact impact operational and transactional performance as well.

Moving forward, it’s imperative for a broader array of stakeholders to be involved in the up-front efforts to tackle the risk factors. Though technology is evolving to address these issues, it does not preclude the need for cross-functional planning and a candid assessment of requirements.