FC 10.0 Starter Kit For IFRS Operating Guide PDF

SAP BUSINESSOBJECTS FINANCIAL
CONSOLIDATION 10.0, STARTER KIT FOR IFRS

Operating Guide
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2011-03-01
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Contents
Chapter 1
Introduction ........................................................................................................................ 10
Presentation ......................................................................................................................... 10
Organization ................................................................................................................ 10
Other Documentation................................................................................................... 10
Database Structure .............................................................................................................. 10
Flow-Based Consolidation ................................................................................................... 11
List of Accounting Flows .............................................................................................. 12
Entering Data in Flows................................................................................................. 14
Balancing Flows ........................................................................................................... 15
Chapter 2
Initializing the Consolidation ............................................................................................ 16

Section Objectives ....................................................................................................... 16
Key Points .................................................................................................................... 16
Suggested Approach ................................................................................................... 16
Documents to be kept .................................................................................................. 16
Updating Reporting Units ..................................................................................................... 16
Key Concepts .............................................................................................................. 16
Structure of the Reporting Unit Table .......................................................................... 17
Procedure .................................................................................................................... 17
Breakdown by Division ................................................................................................ 18
Creating Packages............................................................................................................... 18
Creating a Reporting ID ............................................................................................... 19
Creating Reporting Sets .............................................................................................. 20
Sending Opening Packages ........................................................................................ 20
Entering and Updating Conversion Rates ........................................................................... 20
Conversion Rate Tables .............................................................................................. 20
Conversion Rate Types ............................................................................................... 21
Entering Conversion Rates .......................................................................................... 21
Chapter 3
Collecting Data ................................................................................................................... 23

Key Points .................................................................................................................... 23
Entering Data at Data Entry Site .......................................................................................... 23
Receiving Packages .................................................................................................... 23
Loading Data into Packages ........................................................................................ 24
Publishing Packages ................................................................................................... 24
Receiving, Checking and Integrating Packages .................................................................. 24
Contents
Receiving Packages .................................................................................................... 24

Running Package Controls .......................................................................................... 24
Integrating Packages ................................................................................................... 24
Sending a Given Package Several Times ................................................................... 24
Chapter 4
Consolidation Scope ......................................................................................................... 26

Key Points .................................................................................................................... 26
Documents to be kept .................................................................................................. 26
Concepts and Definitions ..................................................................................................... 26
Definitions .................................................................................................................... 26
Defining Scopes ........................................................................................................... 28
Portfolios .............................................................................................................................. 29
Creating Portfolios and Portfolio Occurrences ............................................................ 29
Copying a Portfolio Occurrence ................................................................................... 30
Controls and Corrections ............................................................................................. 30
Printing a Portfolio Occurrence .................................................................................... 31
Scopes ................................................................................................................................. 32
Statutory and Reporting Scopes .................................................................................. 32
Creating a Scope ......................................................................................................... 32
Making Changes to a Statutory Scope Manually ........................................................ 32
Specific Cases ............................................................................................................. 33
Hierarchical Scope ....................................................................................................... 33
Printing a Scope .......................................................................................................... 33
Chapter 5
Processing the Data: Key concepts ................................................................................. 34

Key Points .................................................................................................................... 34
Introduction .......................................................................................................................... 35
Manual Journal Entries ........................................................................................................ 37
Procedure .................................................................................................................... 37
Defining a Journal Entry Header ................................................................................. 37
Audit IDs ...................................................................................................................... 38
Converting Data ................................................................................................................... 40
Main Principles ............................................................................................................ 40
YTD and Periodic Conversion ..................................................................................... 41
Consolidation Processing .................................................................................................... 42
Defining a Consolidation .............................................................................................. 42
Running a Consolidation Processing........................................................................... 42
Contents
Retrieving and Checking Data ............................................................................................. 43

Data Retrieval Reports ................................................................................................ 43
Checking Consolidated Data ....................................................................................... 43
Chapter 6
Making adjustments to individual accounts ................................................................... 46

Key Points .................................................................................................................... 46
Correcting Package Data ..................................................................................................... 46
Correcting Differences for Net Income N-1 ................................................................. 46
Recommended Solution: Package Processing ........................................................... 46
Other Package Corrections ......................................................................................... 50
Making Adjustments to Packages........................................................................................ 51
Making Fair Value Adjustments ................................................................................... 51
Other Adjustments ....................................................................................................... 53
Making IFRS Adjustments ................................................................................................... 53
Chapter 7
Intercompany Transactions .............................................................................................. 56

Key Points .................................................................................................................... 56
Checking Intercompany Declarations .................................................................................. 56
Running Intercompany Reconciliations ....................................................................... 56
Correcting Differences ................................................................................................. 59
Elimination of Internal Transactions ..................................................................................... 61
Elimination of Reciprocal Transactions ....................................................................... 61
Dividends ..................................................................................................................... 64
Provisions .................................................................................................................... 67
Gains or Losses on Internal Transfer of Assets .......................................................... 70
Chapter 8
Deferred Taxation .............................................................................................................. 75

Key Points .................................................................................................................... 75
Overview .............................................................................................................................. 75
Identifying the Bases of Deferred Tax ......................................................................... 75
Booking Deferred Tax .................................................................................................. 75
Accounting for Deferred Tax ........................................................................................ 76
Chapter 9
Consolidation Entries ........................................................................................................ 77

Section objectives ........................................................................................................ 77
Calculation of Non-controlling Interests ............................................................................... 78
Principles ..................................................................................................................... 78
Contents
Elimination of Investments ................................................................................................... 80

Principles ..................................................................................................................... 80
Converting Consolidated Shareholders' Equity and Investments in Subsidiaries ............... 85
Principles ..................................................................................................................... 85
Manual Journal Entries ................................................................................................ 85
Analysing the changes in the foreign currency exchange reserve for the Group ....... 89
Optional Conversion Process on Investment and Capital/Share Premium ................. 90
Equity Method ...................................................................................................................... 92
Principles ..................................................................................................................... 92
Booking of Goodwill ............................................................................................................. 96
Full and Proportionate Consolidation Methods ........................................................... 96
Goodwill for EM Entities .............................................................................................. 98
Chapter 10
Scope Changes .................................................................................................................. 99

Key Points .................................................................................................................... 99
Overview of the Scope Changes ......................................................................................... 99
Typology of Scope Changes ....................................................................................... 99
Scope Changes: Using the Right Flow ...................................................................... 100
Events Covered in this Documentation ..................................................................... 101
Incoming Entities ................................................................................................................ 101
Preparing the Reporting Cycle .................................................................................. 101
Automatic Processing ................................................................................................ 102
Manual Processing .................................................................................................... 103
Outgoing Entities ................................................................................................................ 104
Preparing the Reporting Cycle .................................................................................. 104
Automatic Processing ................................................................................................ 106
Manual Processing .................................................................................................... 107
Chapter 11
Completing the Consolidation ........................................................................................ 108

Section Objectives ..................................................................................................... 108
Key Points .................................................................................................................. 108
Checking the Statement of Comprehensive Income ......................................................... 108
Overview of the Statement of Comprehensive Income Reports ............................... 108
Calculation matrix ...................................................................................................... 109
Manual Journal Entries .............................................................................................. 110
Path between the Statement of Comprehensive Income and the Statement of
Changes in Equity...................................................................................................... 110
Checking the Statement of Changes in Equity .................................................................. 111
Checks Specific to Certain Accounts ......................................................................... 111
Checking Variation Flows .......................................................................................... 111
Contents
Performing Detailed Checks for Reporting Units ....................................................... 113

Calculation matrix ...................................................................................................... 114
Checking the Statement of Cash Flows ............................................................................. 114
Overview of the Statement of Cash Flows Reports ................................................... 114
Analyzing Differences ................................................................................................ 115
Manual Journal Entries .............................................................................................. 117
Checking IFRS adoption .................................................................................................... 119
Introduction
Introduction
Presentation
Organization
The operating guide is organized according to the steps performed in a consolidation processing.
Preparing the reporting cycle: This step describes how the consolidation is initialized (see
Initializing the Consolidation on page 16), how package data is collected (see Collecting Data on
page 23) and how the Group structure is defined (see Consolidation Scope on page 26).
Processing the data: This step describes the main concepts (see Processing the Data: Key concepts
on page 34), how intercompany transactions are eliminated (see Intercompany Transactions on
page 53), how deferred taxes are computed (see Deferred Taxation on page 75) and how
technical consolidated journal entries are posted (see Consolidation Entries on page 77).
Completing the consolidation: in this step the entire consolidation is validated on the basis of the
Statement of Changes in Equity and the Cash Flow Statement (see Completing the Consolidation
on page 108).
Each section presents:
Key points
A detailed approach with references to other sections for more information.
Other Documentation
The following documentation is available:
Product Documentation: This document, available in the application, describes functions and
procedures.
Configuration Design Documentation: This document offers in-depth knowledge about

customizing the database structure.
You should refer to this documentation to get detailed information about:
using the application for operations and customization purposes.
making changes to the setup of the Starter kit.
Database Structure
All of the information in the database is identified by a set of elements required for storing, processing and
retrieving data. These elements are called dimensions.
The following dimensions are used in the configuration:
Required dimensions
All of the data stored in the database must be identified by these dimensions.
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CATEGORY
The configuration provides one category scenario, called A-Actual, to be used for statutory
consolidations.
DATA ENTRY PERIOD: The date on which the information is entered for all of the defined
periods using the following format: YYYY.MM
PERIOD: The same value as the data entry period in a statutory consolidation.
Introduction
REPORTING UNIT: The company or Business Unit whose data is being entered.
CURRENCY: The currency in which the data is stored.
ACCOUNT: The balance sheet and income statement accounts as well as technical accounts
for consolidation purposes, for example suspense accounts.
FLOW (see Flow-Based Consolidation).
AUDIT ID: The ID that identifies the origin of the data for packages, local adjustments,
manual journal entries, and automatic journal entries.
Analysis dimensions
PARTNER: The reporting unit involved in an intercompany transaction.
MANAGEMENT UNIT: In-built dimension not used in the starter kit
PARTNER MANAGEMENT UNIT: In-built dimension not used in the starter kit.
SHARE: The held company in the investment portfolios.
COUNTRY: The breakdown of external sales by geographical area.
ANALYSIS
Used to build the Statements of Cash Flows, Changes in equity, Comprehensive income. Also
used for data entry on a daily basis for flows F20/F40 on Investment, F40 on Issued
capital/Share premium and F06 on Dividends.
Note: These dimensions do not always contain values.

Dimensions specific to consolidation processing
SCOPE, VARIANT and CONSOLIDATION CURRENCY: These dimensions are used to identify
a consolidation definition.
Technical dimensions
JOURNAL ENTRY NUMBER
LEDGER
ORIGINAL REPORTING UNIT
TECHNICAL ORIGIN
GEOGRAPHICAL ORIGIN
Note: Data for these dimensions is automatically loaded by the application.

Example
Reporting unit RU1 has 5 000 in cash at the end of the 2009 fiscal year.
This information, which originates from the data entry package, is stored as follows in the database:
Category
Data Entry
Period
Period
Reporting
unit
Currency
Account
Flow
Audit ID
Amount
2009.12
2009.12
RU1
EUR
A2610-Cash
on hand
F99Closing
PACK01Package Data
5 000
For more information on the database structure, see the functional design documentation.
Flow-Based Consolidation
The flow dimension is used to identify and analyze the changes between the opening and closing balances.
The accuracy of automatic processing depends on whether data has been correctly entered in flows. Flows
differ according to the account being analyzed.
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Introduction
List of Accounting Flows

Types of Flow
Opening and closing balances correspond respectively to flows F00 and F99. Variation flows can be
organized into the following categories:
Flows for Current Transactions
Income statement
Transactions for the income statement are posted in flow Y99.
Debt management
Movements in debt management items, made up of current assets and liabilities (excluding provisions) and
the cash flow are posted in variation flow F15.
Example
You want to enter an amount of 100 excluding VAT from the sale of goods.
In company accounts:
Account
Sale of goods
Accounts receivables
Debit
Credit
100
100
In the application:
Account
P1100 Revenues
A2210 Trade receivables, Gross
Flow
Y99
F15
Debit
Credit
100
100
Depreciation, impairment and provisions

The balance sheet movements due to depreciation, impairment and provisions are posted using the
following flows:
F25 - Increase in depreciation
F35 - Decrease in depreciation
Example
You want to enter a gross amount of 100 as allowances for provisions on shares.
In the accounting system:
Account
Depreciation on investment
Allowance/depreciation of investments
Debit
Credit
100
100
In the application:
Account
A1812 Investments in subsidiaries, JV and
associates, Impair.
P2210 Allowances for provisions on shares
Flow
F25
Debit
Y99
100
Credit
100
Equity
In equity accounts, shareholders' equity is processed separately from the other items.
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Introduction
Movements in shareholders' equity usually originate from:
The distribution of dividends (posted in flow F06)
The income of the current fiscal year (recorded in F10)
The increase or decrease in capital (posted in F40)
Movements that come under Other comprehensive income, for example, flow F55 on fair value
reserve
Other specific operations, like acquisition (flow F20) and disposal (flow F30) of treasury shares
Note: In the Equity section of the Balance sheet, there is no specific account for the Net profit of the period.
This net profit must be included in account E1610-Retained earnings.
Non-current assets and liabilities
For the non-current assets and liabilities:
Increases are posted in F20.
Decreases are posted in F30.
Investments in subsidiaries and capital subscription (increase, decrease or creation of capital)

are posted in F40.
Example
You invest in the creation of Company F by subscribing 1 000 to its capital. During the year, you buy an
associates share for 250. This investment is financed by a bank loan.
In the accounting system:
Account
Investments in subsidiaries
Bank loans
Debit
1 250
Credit
1 250
In the application:
Account
A1810 Investments in subsidiaries, JV and associates
L1510 Borrowings, Non current
Flow
F40
F20
F20
Debit
1 000
250
Credit
1 250
Transfers between items

Transfers between balance sheet accounts are recorded in F50-Reclassification.
Adjustment to IFRS standards
Variations in fair value for financial assets and liabilities are posted in F55-Fair value.
Flows for Specific Transactions
The flows used for specific transactions are as follows:
Changes in accounting policies: The impact on balance sheet items is posted in F09-Change in
accounting policies, which must balance (Total Assets = Total Liabilities) .
Contribution to capital and merger transactions: The impact on balance sheet items, including
issue of shares for capital contribution, is posted in F70-Internal mergers. Any impact on the net
income for the period is recorded in account P1620-Merger result.
13
Introduction
Flows Specific to Consolidated Accounts

The flows specific to consolidated accounts are generated automatically by the application and are as
follows:
Effect of foreign exchange rate variations: F80
Effect of variations in scope:

F01: Incoming units
F02: Change in consolidation method (old). This flow is used as the reverse opening flow
for reporting units that change their consolidation method, for example from the equity
method to a full or proportionate consolidation or vice versa.
F03: Change in consolidation method (new). This flow is used as the incoming flow of the
new consolidation method.
F04: Change in consolidation rate. This flow records the impact of change in consolidation
rate for subsidiaries consolidated using the proportionate or equity method.
F92: Change in interest rate. This flow corresponds to the impact of change in Group
financial interest on the equity.
F98: Outgoing units
Entering Data in Flows

In Data Entry Packages
In the consolidation package, you must enter the closing balance in F99. Flow F15-Net variation is then
automatically calculated by subtracting the sum of the opening flow and other movement flows from the
closing flow (F99).
Flow F15 is used as a control flow that should be analyzed using the relevant variation flows, for all the
balance sheet items except:
Cash accounts
Current assets/liabilities accounts, excluding depreciation, impairment and provisions, for which no
detailed analysis by flow, like increase/decrease, is required to build the Statement of cash flows.
Example
Company A has assets of up to 100 at closing, as compared to 50 at opening. After entering or importing
data, the assets variation table should be as follows:
ACCOUNTS
CODE
Assets
A11xx
F00
50
F99
F20
F30
F50
Increase Decrease Reclass.
Other
100
Control
(F15)
50
Movements during the fiscal year correspond to an investment of 80 and a sale of 30. Data should
therefore be entered in the schedule as follows:
ACCOUNTS
CODE
Assets
A11xx
F00
50
F99
100
F20
F30
F50
Increase Decrease Reclass.
80
-30
Other
Control
(F15)
0
In Journal Entries
Regardless of whether they are automatic or manual journal entries, they are automatically saved in a
movement flow that carries over data to the closing balance of the balance sheet.
14
Introduction
Balancing Flows
Certain flows must be balanced for assets and liabilities/equity. Others must ensure that assets - liabilities =
income.
Flow
F00 Opening
F01 Incoming units
F03 Change in consolidation method (new)
F09 Change in accounting policies
F50 Reclassification
F70 Internal mergers
F80 Currency translation adjustment
F99 Closing
Assets Liabilities =
Equity
X
X
X
X
X
Assets - Liabilities = Income

(income statement accounts)
X (P1620)
X
X
If these principles are not respected in manual journal entries, then cash flow statements may
not be balanced. Data retrieval reports are used to ensure that flows are balanced.
15
Initializing the Consolidation

Section Objectives
To present all of the tasks required to run a new consolidation processing.
Key Points
To initialize a new consolidation processing, you should:
Update the list of companies and data entry sites
Create packages for the data entry period or send opening packages to the subsidiaries
Enter the conversion rate for the period
Before creating packages or sending packages to subsidiaries, you should add all of the Group's
incoming companies to the list of companies. You can manage the list of companies in the Dimension
Builder module of the Setup domain.
You can manage the opening packages to be sent to subsidiaries and opening balances, if required, in the
Reporting Organizer and RU Organizer modules of the Operation domain.
Conversion rates for the period can be entered before or after you send the packages to the subsidiaries.
For the list of companies, however, you must update it first in order to determine exactly which
currencies will be required for the consolidation.
Suggested Approach
1. Update the list of companies in the group and the list of data entry sites.
2. Create packages or send opening packages to subsidiaries.
3. Enter conversion rates for the period.
Documents to be kept
Printout of the conversion rate tables
Updating Reporting Units

The Reporting Unit is the elementary component of the Groups structure. Each Reporting Unit populates a
package.
In a statutory consolidation, a Reporting Unit is usually a legal entity, but it can also be a sub-group, a
branch, a business unit, or a department.
Key Concepts
The reporting unit table contains all of the reporting units for which the Group has defined a code,
regardless of whether or not they will be consolidated.
You can assign a code to companies that are not linked by their capital to the Group. You usually do so
in the following cases:
16
When the Group is included in the consolidated accounts of another Group, even though it
consolidates data at its own level. By specifying a code for sister or parent companies, you
can manage all of the data required for the top level consolidation process (for example,
investments and intercompany transactions).
When the Group wants to perform breakdowns by partner (customers/suppliers) using consolidated
data.
The code TP-999-Third parties corresponds to all of the reporting units that do not have a
code. You should never delete it.
Structure of the Reporting Unit Table

A certain amount of information for each Reporting Unit is stored in the database. This information includes
characteristics or sub-characteristics. This information is required because it enables the Reporting Unit to
be correctly included in the consolidation processing.
Currency
This identifies the currency in which data is collected.
Country
This indicates the country in which the Reporting Unit's headquarters are located. This characteristic is
used to produce geographical area analysis.
Company
This is the legal entity to which the Reporting Unit belongs. A Reporting Unit may be its own legal entity.
This information is required when the consolidation scope is being defined.
Several business units (BUs) may correspond to the split of one legal entity. In that case, all these BUs will
have the same Company (corresponding to the Head BU).
Purpose
This characteristic is used to distinguish between Legal entity, Business unit, Sub-consolidation, Archived,
and Technical Reporting Units.
Division
When your consolidation definition is based on a hierarchical scope, the Division characteristic is used to
eliminate intercompany transactions by distinguishing between inter/intra segment transactions
during a consolidation processing.
Branch
This sub-characteristic identifies the branch for each Division. It is used to create a Reporting Unit hierarchy
that can be used in the Scope Builder module.
The Division characteristic and Branch sub-characteristic share the same reference table.
Procedure
To add a Reporting Unit (Dimension Builder module, Setup domain)
1. Expand the tree structure to display Data sources > Amounts > RU-Reporting unit. Check that
the Load data mode is enabled.
17
2. Select File > New.

In the General tab, enter the code, short description and long description you want to assign to
the new reporting unit.
In the Properties tab, enter the characteristics and properties for the new reporting unit.
3. Translate the descriptions in the Translate tab.
If you do not translate the descriptions into other languages, then when subsidiaries
open the application in a language other than English, they will not be able to see
the descriptions of their partners when entering intercompany data.
4. Select File > Save.

5. Select File > Close.
Breakdown by Division
To ensure a correct breakdown by Division/Branch, you should:
Create new members in the Division/Branch list.
Select the Branch sub-characteristic for each of the divisions.
Select the Division characteristic in the Reporting unit table for each of the reporting units.
Note: The breakdown by division as proposed in the IFRS Starter kit is based on the following
principle: 1 reporting unit = 1 division = 1 branch.
If your Group holds companies corresponding to multiple divisions, you have to split the legal entity
or entities into several mono-division reporting units.
To create a new Division or Branch

1. In the Dimension Builder module of the Setup domain, expand the tree structure to display
Reference tables > EN-DIVISION and check that the Load data mode is enabled.
2. Select File New.
In the General tab, enter the code, short description and long description you want to assign to the
new activity or branch.
3. For a new Division, enter the Branch sub-characteristic in the Properties tab.
4. Select File > Save.
5. Select File > Close.
Creating Packages
You create packages in three stages:
18
Create a reporting ID in the Reporting Organizer module of the Operation domain.
Define the list of reporting units included in the reporting ID in the RU Organizer module of the
Operation domain and adapt these settings for some of the reporting units, if needed.
Generate the packages on the current site or send packages to another data entry site in the
RU Organizer module of the Operation domain.
Creating a Reporting ID
A Reporting ID consists of:
A category, like a type of data to be processed. For example category A for statutory consolidations.
A data entry period, for example 2009.12 for the yearly consolidation on 31 December 2009.
A Reporting ID contains properties that are applied by default to all of the packages included
in it, except for changes made individually to the properties of certain Reporting sets (RU Organizer module).
In the IFRS Starter kit, the following options must be considered when creating a Reporting ID:
Category Scenario
The Starter Kit comes with one category scenario: A-Actual, version C-Current.
Data Entry Folders

In the IFRS Starter kit, two package formats are available:
P-A - Package for Actual

This package is used when entering data for entities consolidated using the Full or Proportionate
consolidation method.
P-E - Package for EM companies

This is a package dedicated to entities consolidated using the Equity method. The list of accounts to
enter is much smaller, including only Equity accounts, Net Income for the period and Dividends paid.
In case an EM entity holds subsidiaries, it should be included in the groups consolidated financial
statements based on its own sub-consolidated accounts, according to IAS 28. For this reason, some
consolidation flows are available in the P-E package schedules.
Note: The same folders are available for data entry via both the Windows and Web interfaces.
Sets of Controls
Two sets of controls have been defined in the starter kit, and correspond to the package formats available
for data entry.
Depending on which data entry folder you choose, you have to specify the corresponding set of controls (PA or P-E).
Control Level
Two control levels can be applied to packages:
LEV1 Balance Analysis is used to group together basic accounting controls, such as Assets
Liabilities = Equity. The controls checking the breakdown of Investments and Equity by flows also
come under LEV1.
LEV2 Flow Analysis is used to check that flow analyses are complete.
Origin of Opening Balances

We recommend that you use data from consolidated tables rather than preconsolidated tables (see
Processing the Data: Key concepts on page 34) so that the data used for package opening balances is
consistent with data from the consolidated opening balances.
When several consolidations have been run using different variants, you can choose any variant for the
package opening balances, as long as the package data and corrections are identical for all variants.
When initializing a consolidation for the first time, the "Opening balance data" option should be disabled.
19
Restrictions
Read-only flows: When the opening flow (F00) is selected, data in opening flows cannot be
changed in the package. Enable the "Read-only flows only if there is an opening balance" option in
order to let incoming reporting units enter their opening balances.
Read-only periods: This option is not used in the Starter Kit because category A-Actual has only
one period for entering data, identical to the Reporting ID's data entry period.
Data entry restrictions: The Starter Kit comes with one default data entry restriction, PACKSTD (Package Standard), that limits the available members for the following dimensions:
AC-Account: All the accounts are allowed except archived and consolidation-specific accounts.
ANALYSIS (multi-purpose dimension): The reference members available are the dates, used
for optional currency translation process.
Note: If you decide to apply a Monthly or Quarterly conversion (see YTD and Periodic Conversion
on page 41), you may need to use a different data entry restriction. For example, PACK-Q2 when
you process the quarterly consolidation for June.
Creating Reporting Sets

When you create a Reporting ID in the Reporting Organizer module of the Operation domain, you also
define the general environment for all Reporting Units. Once this is done, you should:
Create a reporting set for each reporting unit required to enter data in a package.
Validate or update the reporting properties for each reporting unit if required. Besides the
properties from the Reporting ID defined in the Reporting Organizer module, the reporting set
presents additional properties in the Roadmap tab which are used to define the data entry site,
currency and users authorized to access the package in data entry.
Sending Opening Packages

Two possibilities are offered to enter data in the packages:
Entering data at decentralized data entry sites in the Windows interface

Note: If you want to use this option, you must first send opening packages by creating a new send task
and including the transferable object Opening package.
Entering data in packages at central site
When data is entered in the package at central site, you do not need to create a send task.
You can make the package available directly in the RU Organizer module by right-clicking the reporting set
and selecting "Generate Package at Current Site".
Note: Detailed information on sending opening packages is available in the application help.
Entering and Updating Conversion Rates

Conversion Rate Tables
Conversion rates are identified by:
20
a rate version
a period
The rate versions enable you to specify different conversion rates for the same period and therefore
simulate different consolidations. You usually use this functionality:
To produce temporary accounts when the currency exchange rate is not yet known, for example
when publishing data in advance for intercompany transactions.
To run simulations using different currency scenarios.
In the Starter Kit, two conversion options are available, depending on whether you apply YTD or periodic
(Monthly or Quarterly) exchange rates (this will be dealt with in detail in chapter YTD and Periodic
Conversion on page 41). As a result, two rate versions are available by default: A-YTD and A-PER.
You can also create new conversion rate versions.
Conversion Rate Types

For a given rate version and period, the following conversion rate types are available:
ARPP - Average exchange rate, prior period
OR - Opening exchange rate, current period
AR - Average exchange rate, current period
CR - Closing exchange rate, current period
Daily-specific rates
The ARPP rate type is used only if you apply Monthly or Quarterly conversion (see YTD and Periodic
Conversion on page 41).
Daily-specific rates were created to enable the conversion of paid dividend (F06) at the rate of distribution.
Paid dividends are entered by beneficiary and date in the package and converted by default to the average
rate or at the rate of the day when entered (see Dividends page 64).
Daily rates also enable the conversion of F20/F40 on Investment and Issued capital/Share premium, based
on daily rates rather than the average rate for the period (see Optional Conversion Process on Investment
and Capital/Share Premium page 90).
A report checks the consistency between the analysis by date entered in the package and daily rates
entered in the conversion rate table.
The conversion rates entered are based on the base currency selected by users for each conversion rate
table. This currency has a conversion rate equal to one for all rate types.
The choice of this base currency is not related to the currency in which the consolidation is run.
Entering Conversion Rates

You can enter conversion rates in one of the following ways:
Enter the different rate types in the conversion rate table.
Import data from a file (see the product documentation).
Calculation Methods
Conversion rates can be expressed as follows:
Divide: The amounts entered are divided by the conversion rate for the "Certain for uncertain"
calculation method.
Multiply: The amounts entered are multiplied by the conversion rate for the "Uncertain for certain"
calculation method.
21
Example
The base currency is USD. Exchange rate for USD and EUR are entered as follows, depending on the
calculation method you choose:
Currency
USD
EUR
Divide
1
0.67253
Multiply
1
1.48692
Conversion Rates Specific to Certain Reporting Units

You can enter a conversion rate specific to one reporting unit. You use this option for incoming and
outgoing companies, for example the opening rate for an incoming reporting unit is the rate applicable at
the time it was included in the scope and not the rate applicable on the first day of the data entry period.
This is explained in chapter Incoming Entities on page 101.
Daily Rates
To enter daily-specific rates for a given currency you should add columns in the right part of the conversion
rate table. The list of additional rate types corresponds to the days of the year.
th
For example, if a particular consolidation event occurred on Sept 14 , first add the 09.14-September 14
rate type in the list of available columns, then enter the exchange rate for the relevant currencies at this
date.
The exchange rate for the pivot currency must always be populated (with a value of 1) for any of the
date-specific rate types to ensure a correct conversion process.
Besides, if the consolidation currency differs from the pivot currency, you must also populate the
exchange rates of the consolidation currency for any of the date-specific rate types.
In case you apply periodic conversion, enter daily-specific rates only for the dates included in the period
(month or quarter).
For example, if you use quarterly conversion, the conversion rate table for Q3 should only include rates for
st
th
dates from Jul 1 to Sept 30 . Indeed, if a consolidation event occurred in Q2 and you entered specific
exchange rates for the corresponding date in Q2 conversion rate table, the conversion for F20 or F40 has
already been done in the consolidation for Q2 and should not be re-processed in Q3.
22
Collecting Data
Collecting Data
Section Objectives
To describe how package data is collected.
Key Points
At local data entry sites, data is loaded manually into consolidation packages by entering data , or
automatically by interfacing with the accounting system or by importing data tables.
After the data is entered or imported, controls must be run on packages, which are then published and sent
to the consolidation department (in the case where data entry is decentralized).
In order for the package data to be included in the consolidation, packages must be integrated into the
database.
Suggested Approach
At data entry site:
1. Receive the opening package sent by the consolidation department (if applicable).
2. Enter or import data to the package.
3. Run controls on the package.
4. Publish the package so that its data is made available to the consolidation department.
At the consolidation department:
1. Receive the packages (if applicable).
2. If there are no send conditions, check that the package sent has reached the control level required.
If this is not the case, then run controls and correct the errors.
3. Integrate package data into the database.
Entering Data at Data Entry Site

Receiving Packages
To receive packages, perform the following actions:
Define an inspection task so that it can detect the objects to be received. If objects are detected by
this task, then a new reception task RYYMMDD.000x will be automatically created.
Run the reception task.

This procedure only applies to the Windows client when the packages are filled out on a decentralized data
entry site. In any other case, the packages are directly available on the current site without performing any
additional action.
23
Collecting Data
Loading Data into Packages

The procedure to enter or import data into a package and to run package controls is described in detail in
the Package Data Entry Guide.
Publishing Packages
After a package has been filled out, it must be published so that it will be available at the central level when
the consolidation is processed.
When the data entry is done on a different site from the consolidation site, the publication of a package
creates a Send objects task with the package.
There are several publication options. To learn more about them, refer to the application help.
Receiving, Checking and Integrating Packages

Receiving Packages
Just like at data entry sites, to receive packages, perform the following actions (see Receiving Packages on
page 23):
Define an inspection task so that it can detect the objects to be received. If objects are detected by
this task, then a new reception task RYYMMDD.000x will be automatically created.
Run the reception task.
Running Package Controls

If the "Blocking" option was checked when the packages were created or sent to the subsidiaries, then the
control level set must be reached before the subsidiaries can publish or send their packages back to you.
However, the send condition is not always required for a reporting process that is carried out for the
first time or for incoming entities. For these two cases, you will, however, need to know the control level
reached by the package before integrating it. If the package does not comply with the control level set, you will
also need to rerun controls in order to obtain details on the errors.
Integrating Packages
This step is used to integrate packages automatically in the preconsolidated table that will be used when
the consolidation is processed. This step is mandatory for running the consolidation processing and must
be performed:
Once you have received the package and checked that its data is correct.
When changes are made to a package which is then published again, if you want these changes to
be included in the consolidated accounts.
Sending a Given Package Several Times

A subsidiary may need to send its package several times to central site if it incrementally corrected or
completed its package data.
24
Collecting Data
If the consolidation department wants to find out which changes were made to the accounting data as
compared to the previous version, it can display/print the following schedule for the relevant Reporting Unit:
Folder
Book
Schedule
C4
C41
C41-05 Compare local/pre-consolidated data
An overall control report (not detailed by elementary accounts) can also be run for all the packages related
to one Reporting ID:
Folder
Book
Schedule
C4
C41
C41-10 Check integration by Reporting Unit
You should consult these schedules before integrating the new version of package data.
25
Consolidation Scope
Consolidation Scope
Section Objectives
To define the consolidation scope.
Key Points
The configuration proposes three ways to define your scope:
An automatic mode, where you first enter data in packages, and then generate the portfolio and the
scope automatically.
A semi-automatic mode, where you first enter data in the portfolio manually, and then generate the
scope automatically.
A manual mode, where you enter data in the scope manually or copy an existing scope.
Before creating the consolidation scope, you should first have updated the list of companies in the Group
(see Initializing the Consolidation on page 16). This is done in the Scope Builder module of the Operation
domain.
The Starter Kit offers segment reporting capabilities, based on hierarchical scopes.
Suggested Approach
1. Create a portfolio.
2. Load data in the portfolio in one of the following ways:
Initialize it using the data collected in the packages. (mode 1)
Enter data manually or copy an existing portfolio. (mode 2)
3. Create a scope.
4. Load data in the scope in one of the following ways:
Initialize it using the portfolio. (mode 1 and 2)
Enter data manually or copy an existing scope. (mode 3)
5. Define the hierarchy to be applied for Reporting Unit Rollup calculations
Documents to be kept
Printout of the portfolio
Printout of the scope
Concepts and Definitions

Definitions
Portfolios
A portfolio consists of information about the direct legal investments between companies in the same
corporation. It:
26
stores the number of shares and voting rights owned by companies.
stores the number of shares and voting rights held by one company in another.
Consolidation Scope
uses shares and voting rights to calculate the direct investment, financial interest and ownership
interest of one company in another (see Rates Used).
Consolidation Scope
The scope shows the following for all of the companies included in it:
The consolidation method, like Not consolidated (NC), Full (FC), Proportionate consolidation (PC)
and Equity method (EM).
The financial interest, ownership interest and consolidation rate.
Besides this data displayed at period closing, the application also displays the data from the previous
period. This enables you to identify scope changes:
Incoming entities (I)
Outgoing entities (O)
No variation (N)
Segment Analyses
The segment reporting, especially the Revenue by segment, relies on the Reporting Unit Rollup
functionality. It automatically calculates the inter-intra segment eliminations using the hierarchical scope
entered in the consolidation definition. Therefore, it is mandatory to define the unit hierarchy to be applied
in the Hierarchical scope step; otherwise, the reports dedicated to segment analyses will not retrieve
consistent data.
Rates Used
Direct Shareholding, Financial Interest and Ownership Interest
The portfolio refers to three types of rate:
Direct shareholding: This represents the percentage of shares a parent company holds in the held
company.
Financial interest: This represents the percentage of capital that a parent company holds directly or
indirectly in the held company.
Ownership interest:
When one company holds another company directly, the ownership interest is the same as the
shareholding percentage.
When one company holds another one via intermediate companies, the ownership interest is
calculated by adding together the direct shareholding percentages held by the companies in
which there is an interest greater than 50% (because the default control threshold is 50%).
Example 1
M
60%
F1
Subsidiary
Parent
company
Direct
shareholding
Financial
interest
Ownership
interest
F1
60%
60%
60%
F2
50%
M
F1
50%
50%
(1)
80%
50%
100% (2)
50%
50%
F2
(1)
(2)
Percentage of financial interest of M in F2 = 50% (direct) + 60% x 50% (indirect via F1) = 80%
Percentage of ownership interest of M in F2 = 50% (direct) + 50% (indirect via F1, as more
than 50% of F1 is held)
27
Consolidation Scope
Example 2
M
Subsidiary
Parent
company
Direct
shareholding
Financial
interest
Ownership
interest
F1
20%
20%
20%
20%
F1
F2
50%
M
F1
50%
(1)
F2
(2)
50%
50%
(1)
50% (2)
50%
60%
50%
Percentage of financial interest of M in F2 = 50% (direct) + 20% x 50% (indirect via F1) = 60%
The percentage of F1 in F2 is not taken into account because M's interest in F1 is less than
the threshold.
Consolidation Rate
Besides the financial and ownership interests, scopes also display the consolidation rate. This rate
depends on the consolidation method:
For a fully consolidated company, it is 100%.
For a proportionate consolidation, it represents the share of assets and liabilities

(or expenses and income) included in the Group balance sheet (or income statement ). It is equal
to the sum of all direct shareholdings in the subsidiary held by companies in the scope, after the
consolidation rates for the latter have been applied accordingly.
For a company consolidated using the equity method, it represents the Group share used to
calculate the consolidated value of the investments in associated undertakings. It is calculated in the
same way as in a proportionate consolidation.
Example
M
Company
Ownership
interest
Consolidation
method
Financial
interest
F1
80%
Full
80%
100%
F2
20%
Equity method
16%
20%
80%
F1
Consolidation
rate
(1)
(2)
20%
(1)
F2
(2)
F1 fully consolidated so consolidation rate = 100%

Consolidation rate for F2 = direct rate via F1 (20%) x F1 consolidation rate (100%) = 20%
Initial Values/Revised Values

The number of shares as well as the rates displayed in portfolios and scopes have two different values:
Initial value: This is the value calculated by the application using source data when initializing the
following automatically:
Portfolios (source data = preconsolidated data)
Scopes (source data = portfolio)
Revised value: You can enter this value manually in a scope or portfolio. If this value exists,
then it will take priority over the initial value when applying rates in consolidation processing.
Defining Scopes
The configuration proposes three ways to define consolidation scopes in order to select which entities are
to be consolidated, the consolidation method and rates to be used.
You must define the unit hierarchy to be applied, whichever way for defining scopes you choose.
Otherwise, consolidations using a set of rules that includes a Reporting Unit Rollup rule cannot be
processed.
28
Consolidation Scope
Automatically
Portfolio is automatically generated by loading data entered in consolidation packages:
By the subsidiaries in schedule PA2600: This schedule outlines the distribution of capital in number
of securities per shareholder (group and third party) after having entered the total amount of capital
(account E1110) and the total number of shares (account XE1110).
By the shareholder in schedule PA2400: This schedule analyzes the variation in investment
securities held, by number (account XA1810).
The direct shareholding rate is derived from the total number of capital shares declared by the subsidiary
and the number of shares held declared by the parent company or companies. The scope is then
generated automatically using the portfolio.
This is the surest method because you can check that shares declared by subsidiaries and parent
companies correspond, and because the rates for direct shareholding, financial interest, ownership interest
and consolidation are calculated automatically.
Semi-Automatically
In this method, you enter the portfolio manually and then generate the consolidation scope automatically.
This method is often used when the consolidation department wants to build the scope before having
received all the packages, assuming that legal data is available and up-to-date in the central database.
Manually
This method consists of loading data in the scope either by entering it manuall y, or by copying an
existing scope. This method is adopted when defining pro forma accounts, or when performing simulations.
It does not, however, enable you to check the consistency of the data entered.
Portfolios
Creating Portfolios and Portfolio Occurrences
You manage portfolios in the Scope Builder module of the Operation domain. You enter data
in a portfolio in two stages:
Create a portfolio with a code and description, and specify a number of settings for loading and
calculating rates. This is only mandatory when performing the reporting cycle for the first time.
Create a portfolio occurrence in order to enter data for a given data entry period.
Properties Tab
Voting rights are proportionate to shares Option
If you select the "Voting rights are proportionate to shares" option, then the number of shares that you enter
are applied automatically to the number of voting rights, which are then used for calculating ownership
interest.
Moreover, the fields displaying the number of voting rights are grayed out. You can only change this value
by changing the value for the number of shares.
Therefore, this option is:
to be deactivated when you initialize the portfolio with data entered in packages, which is the
recommended method,
only advisable when portfolio is entered manually, in order to avoid a double keying.
29
Consolidation Scope
Other Parameters
The table below indicates the manner in which you should enter the other Properties tabs parameters
when defining either a Portfolio or a Portfolio occurrence. These parameters are required only if you want to
initialize the portfolio using the data collected in the packages.
Only available for a
portfolio occurrence
Parameter
Value
Reporting ID (Category)
A Actual
Reporting ID (Data entry

period)
[Data entry period of the

consolidation]
Period
[Same value as Data entry period]
Flow
F99 Closing position
Non-group reporting unit
TP-999 Third parties
Audit ID filter
AU1-S-R Level S and R, i.e.

package origin
Initialization Tab
If you want to initialize the Portfolio occurrence using the information collected in the packages, the
Initialization tab should be filled out as follows:
For declaring
capital stock
For declaring
portfolio
Parameter
Value
Parent company
SH - Share
Subsidiary
RU Reporting unit
Shares
AC1-001 Issued capital Number of stocks
Voting rights
AC1-001 Issued capital Number of stocks
Parent company
RU Reporting unit
Subsidiary
SH - Share
Shares
AC1-002 Investment in subsidiaries, JV,

associates Number of shares
Voting rights
AC1-002 Investment in subsidiaries, JV,

associates Number of shares
Copying a Portfolio Occurrence

In the application, you can copy a list of investments from one portfolio occurrence to another, regardless of
the other initialization settings.
Controls and Corrections

Controls of the Investment
Control reports are available in the software to check the consistency of portfolio data. The Control reports
available are the following:
30
Consolidation Scope
Investments Greater than 100%

This report displays errors coming from stockholdings greater than 100%, for instance, when the total
number of shares held is bigger than the share capital declared by the subsidiary or when the sum of direct
and indirect stockholding is greater than 100%. We recommend that you print this report using revised
data, which is used to generate consolidation scope from portfolio.
Missing Capital Stock
This report shows the list of reporting units that have not entered the number of shares included in their
capital, on the account used for the initialization of the investment.
Revised Data/Declarations
This report shows the discrepancies between a holding and its subsidiary on revised values. The subsidiary
enters in its data package the number of shares by shareholders. The holding enters the number of shares
it holds. This report reconciles these two declarations.
Note: The Control for declarations report also shows the reconciliation, but on initial values. We
recommend that you check the revised values, given that they are used for the initialization of the
consolidation scope.
Initial Data/Declarations Control
The discrepancies displayed in this report between the initial value of the shares and the declared shares
indicate that the pre-consolidated data (integrated data packages and manual journal entries) has been
modified since the last initialization of the investment.
This report should be used only if the portfolio was initialized using the data collected in the packages.
Correcting Errors
Use one of the following methods to correct errors:
Direct correction of the package data

It is the easiest way for correcting, but the following steps must strictly be performed:
1. Enter the corrections in the data package.
2. Control and save the data package.
3. Publish and integrate the package.
4. Re-initialize the investment in the portfolio occurrence. This step is critical.
When the dialog box Do you want to save your changes appears, click Yes if you want to
keep any manual modification you might have made within to the portfolio occurrence.
Manual correction of the investment
The major drawback of this solution is the fact that the corrections recorded in the investment will not be
carried forward on the opening balance of the following year.
Printing a Portfolio Occurrence

You can customize the display of portfolio occurrence investments on screen or paper by adding, removing
and sorting the columns displaying rates, number of shares and voting rights.
31
Consolidation Scope
Scopes
Statutory and Reporting Scopes
In the application, you can create two types of scope:
Statutory scopes: These scopes must be generated using a portfolio. They cannot be changed
without first changing the capital and investment rows in the portfolio.
Reporting scopes: These scopes can be created with or without a portfolio and all of their
data can be changed directly.
The consistency between the basic information (the number of shares and voting rights) and the rates in
the scope can only be guaranteed by using statutory scopes.
Creating a Scope
There are two ways of populating a scope, depending on whether or not you want to use a portfolio.
Setting up a Scope using a Portfolio

This can be done with a Statutory scope or a Reporting scope.
You can specify the settings for the opening scope. The application uses this information to identify the
incoming and outgoing reporting units and the rate variations to be used in consolidation processing.
When using the built-in unit Rollup functionality, you must define the hierarchy of the Reporting Units in the
hierarchical scope step.
Note: All reporting units belonging to the scope at opening and closing must be included in the hierarchy so
that the Rollup calculations can be performed.
Setting up a Scope without a Portfolio

This can only be done with a Reporting scope.
For each Reporting Unit, all the parameters (consolidation method, rates, and so on) can be
entered/modified.
You must define the Reporting Unit hierarchy if you want to retrieve consistent segment analyses.
If needed, an opening scope can be specified.
Making Changes to a Statutory Scope Manually

Adding and Deleting Companies
It is possible to add a company to the scope. To do this, the modification must be done in the Investments
step of the scope. Then, in the Scope step, check the consolidation method and change it if needed.
The same method applies when you want to delete a company from the scope. In the Scope step, you
need to make sure the consolidation method is Not consolidated (NC).
Changing the Consolidation Method

Consolidation methods are automatically assigned according to the ownership interest threshold defined in
the Initialize using a portfolio step in the scope editor.
If you select the Full Consolidation method, the consolidation rate will automatically be 100%. In the other
cases, for example for proportionate or equity methods, however, you must change the consolidation rate
manually to ensure that the consolidated accounts are valid.
32
Consolidation Scope
Financial Interest and Ownership Interest

In statutory scopes, you cannot change the financial and ownership interests directly. You should therefore
change the number of shares and voting rights in the Investments step.
Specific Cases
Incoming Companies
By default, the processing applied to incoming companies uses the financial interest and consolidation rate
(1)
at closing. You can specify intermediate rates in order to process the incoming transaction in the incoming
flow and one subsequent operation (purchase or partial disposal) in a variation flow.
Outgoing Companies
In the application, you can manage Reporting Units:
leaving the scope at the start of the period
leaving the scope during the period
acquired, merged, at the start of the period
acquired, merged during the period
By default, an outgoing company is considered as leaving the consolidation at the beginning of the period.
To manage the other three cases, select the Incoming/Outgoing tab, and enter the following parameters:
If the company is merged with another Reporting Unit in the Group, enter the code of this
reporting unit.
If the company is outgoing, merged, during the period, you can consolidate its income and
expenses until the effective outgoing date. To do this, enter the data entry period corresponding to
the package whose data you want to integrate.
Opening rates are applied by default to companies outgoing or acquired during the period. If you want to
use different rates to calculate the non-controlling interests in the net income for the period, check the
"Intermediate rate" option and enter these rates.
Hierarchical Scope
As mentioned before (see Segment Analyses on page 27), some of the segment analyses provided by the
IFRS Starter Kit are based on Reporting Unit Rollup rules. Consequently, defining a hierarchical scope is
required in order to retrieve consistent segment analysis data. The secondary hierarchy tab is not used in
the starter kit.
Printing a Scope
The procedure is identical to the one described for printing a portfolio occurrence (see above).
(1)
In the current version of Financial Consolidation, you cannot manage intermediate consolidation rates for companies
consolidated using the proportionate method. Therefore, you should enter an intermediate consolidation rate that is equal to the
consolidation rate at closing.
33
Processing the Data: Key concepts

Section Objectives
This chapter is the first section that describes how data is processed. It will provide a general overview of
the transition made by package data as it is processed to produce the Group's consolidated accounts.
Key Points
The steps involved in processing package data in order to produce consolidated accounts are:
Integrate data from consolidation packages.
Enter manual journal entries.
Run the consolidation processing to:
Integrate package data according to the consolidation method and consolidation rate.
Convert amounts in foreign subsidiary accounts.
Generate automatic processing.
Each type of data is assigned with a different audit ID to facilitate the analysis of the transition from local to
consolidated figures. An audit ID is used to:
Provide an audit trail for the amount:
Data entered in packages is associated with audit ID PACK01 or local adjustment audit IDs
Data from automatic processing or manual journal entries is associated with other audit IDs
Indicate (in its long description) the purpose of non-package entries, for example PRO20-Elimination
of internal provisions - Auto.
Besides the audit ID, each data is identified by its technical origin, which is used, for example, to distinguish
between automatic processing, manual journal entries, opening balance data.
The following sections will present in greater detail how package data is processed automatically and
manually:
Adjustments to company accounts (see Making adjustments to individual accounts on page 46)
Checking and eliminating intercompany transactions (see Intercompany Transactions on page 53)
Posting consolidation journal entries (see Consolidation Entries on page 77)
Suggested Approach
Our approach for checking and analyzing data is closely linked to the methods used by the consolidation
department.
Regardless of the methods used, we recommend that you use reports available in the application (see
Checking Consolidated Data on page 43) to check that the consolidated accounts are generated correctly
before ensuring that the data meets accounting requirements.
34
Introduction
Before running a consolidation processing, there are two data sources available:
Package data, which corresponds to data entered in packages only, regardless of whether it was
entered in data entry schedules or posted by manual journal entry by the subsidiary.
Unlike consolidation data, package data is not identified by scope, variant or consolidation currency. To
consult this data in the Report Navigator module, you should therefore run data retrieval reports
without specifying any variable for the scope, variant and consolidation currency fields.
Preconsolidated data, which corresponds to:
Package data that is integrated in the central site's database. When you integrate package data,
preconsolidated data is generated.
Data from manual journal entries posted in the Manual Journal Entries module.
Data from automatic journal entries produced by running preconsolidation rules, if these rules have
been set up as an enhancement to the current configuration.
After running a consolidation processing, there are three levels of consolidated data for each consolidation:
Package amounts in the original data entry currency, corresponding to:
The previously defined preconsolidated amounts limited to the companies in the scope used in
the consolidation definition and to the manual journal entries posted using an audit ID taken into
account at the original currency level.
Certain automatic journal entries generated by running consolidation rules that are triggered at
the original currency level.
Automatic journal entries are generated by running a consolidation processing. Depending on
the purpose of the automatic journal entry, it may be generated at the local, converted or
consolidated level.
Converted amounts:
This includes all of the package amounts in the original data entry currency that are converted
using the consolidation currency
The currency conversion is performed during the consolidation processing.
The concepts underlying the currency conversion are described in chapter Converting Data on
page 40.
Additionally, this amount level includes the manual journal entries posted using an audit ID
taken into account at the converted level and automatic journal entries generated at
converted level.
Consolidated amounts:
This includes all of the data at the converted level after the consolidation rates are applied.
The consolidation rates are applied during consolidation processing.
This also includes the manual journal entries posted using an audit ID taken into account at
consolidated level and automatic journal entries generated at consolidated level.
35
Each of the amount levels described above is stored in a separate data table. The relationship between the
different amount levels is seen in the following diagram:
Enter data
in consolidation
packages
PACKAGE
AMOUNTS
Integrate packages
Enter manual journal

entries in the Manual
Journal Entries
module
PRECONSOLIDATED
AMOUNTS
Run consolidation processing 2

(scope S2, variant 1)
Run consolidation processing 1

(scope S1, variant 1)
PACKAGE AMOUNTS
(Original Currency)
Convert to
consolidation
currency
CONVERTED
AMOUNTS
Apply
consolidation
rates
CONSOLIDATED
AMOUNTS
PACKAGE AMOUNTS
(Original Currency)
CONVERTED
AMOUNTS
CONSOLIDATED
AMOUNTS
Example:
Company A is held by the Group at 50% and consolidated using the proportionate method (consolidation
rate = 50%) in scope P1 and fully consolidated in scope P2. Company A enters 100 CUR for Revenues
(account: P1100). The average conversion rate for CUR is 0.08 for 1 EUR.
Retrieval of the data without scope/variant
Account
Flow
Package
Preconsolidated
P1100
Y99
100
100
Retrieval of the data with scope/variant
36
Scope
Variant
Account
Flow
Original
Currency
Converted
Consolidated
S1
P1100
Y99
100
1 250 (=100/0.08)
625 (= 1 250 x 50%)
S2
P1100
Y99
100
1 250 (=100/0.08)
1 250 (= 1 250 x 100%)
Manual Journal Entries

Procedure
You manage manual journal entries in the Manual Journal Entries module of the Operation domain.
Manual journal entries are organized:
by reporting ID
A reporting ID corresponds to a category and data entry period pair. In the configuration, the
category is A.
by ledger within the reporting ID

Ledgers are created by the accountant depending on requirements and on the method used
to organize manual journal entries. You can, for example, have one ledger per type of journal
entry, (for example journal entries with the same audit ID, such as goodwill impairment, or
correction of package data), or one ledger per reporting unit. You can also use one ledger
only to group together all of the journal entries in the consolidation.
You define a ledger for:
A given environment (package and/or central manual journal entries)

A set of audit IDs
One or more categories
A journal entry can only be posted for one Reporting Unit and one audit ID.
Defining a Journal Entry Header

When you create a journal entry, the header fields should be filled out as follows
Compulsory fields:
Reporting Unit: Entity for which the journal entry is posted.
Audit ID.
Period: The default value is the current data entry period.
Journal entry currency: Currency in which the journal entry is posted. The default value is the
data entry currency. It can be changed except for certain audit IDs whose journal entries
must be in the data entry currency.
Note: The Reporting currency field is grayed out and its value is the data entry currency, as
defined in the reporting unit table or as specified later in the reporting set.
Restrict values to be included:
Scope: This is used to restrict the journal entry to the specified scope. If there is no value in
this field, then the journal entry is taken into account for all scopes in which the company is
consolidated.
Variant: This is used to restrict the journal entry to the selected variant.
Consolidation currency: This is used to restrict the journal entry to consolidations using a
specific currency. When you select certain audit IDs that only accept the consolidation
currency, then the value here is identical to the value of the journal entry currency.
Parent reporting unit: In this configuration, you should not select a value for this field.
37
The controls run on manual journal entries are as follows:
Controls to check the global debit/credit balance when the journal entry is posted for
balance sheet or income statement accounts.
Controls to check the debit/credit balance for flows F00-Opening, F01-Incoming units
and F50-Reclassification.
Moreover, only valid account/flow pairs are authorized. This is checked when you post a journal entry.
Using journal entry templates

You can create a new manual journal entry by applying a selected journal entry template. The new
manual journal entry will then be generated using the elements defined in the selected template, for
instance Audit ID, Currency, reference rows and breakdown rows.
Audit IDs
Audit IDs are used to identify each item of data in the database. They are used to provide an audit trail for
the consolidation cycle by identifying the functional origin of the data.
Data entered in the consolidation package
Manual journal entries or automatic journal entries generated by the consolidation processing
Audit IDs are organized by set. There are 5 existing sets:
Local IFRS data: This corresponds to package data (PACK01) and local adjustments to ensure
compliance with Group accounting policies (PACK11) or IFRS (PACKIFRS11 and PACKIFRS12). It
also includes central corrections of package data (PACK91) or central adjustment to IFRS
(PACKIFRS91).
Adjustments: Other adjustments made to company accounts using the Manual Journal Entries
module.
Elimination of reciprocal operations: Elimination of intercompany transactions (such as

receivables/payables, income/expenses) which do not have any effect on the consolidated net income,
as opposed to the other eliminations described below.
Elimination of internal profit: Elimination of the Groups internal profits and losses, such as
dividends or gains or losses on disposal of assets.
Consolidation entries: Journal entries dedicated to consolidated accounts, like calculation of Noncontrolling interests or elimination of shares.
Technical Audit-IDs: Entries used to declare Goodwill or post adjustments on the Statement of cash
flows.
Specific Audit IDs are available to post Manual journal entries. This enables to distinguish theses Audit IDs
from those used by automatic processing when an automated journal entry has been set up.
The table below presents all of the audit IDs that you can use to post a central manual journal entry.
Note: Their names end with a 1 and sometimes a 2, for example DIV11-Elimination of internal dividends.
38
The Amount level indicates at which level of the consolidated data table the booked amounts are
loaded.
The Apply Consolidation rate column indicates whether or not the consolidation rate is applied to
the booked amounts.
Apply
consolidation
rate
Amount
level *
Package data - Central correction
PK
Package data - IFRS central correction
PK
ADJ91
Other adjustment - Central - Man.
PK
ADJIFRS91
IFRS adjustment - Central - Man.
PK
Fair value for incoming entities (central) - Man.
PK
Name
Description
Local IFRS data

PACK91
PACKIFRS91
Adjustments
FVA11
Elimination of reciprocal operations

ELIM11
Elimination of intercompany accounts - Man.
CONV
Elimination of internal profit

DIS11
Elim. of internal gain/loss on disposal of assets - Correction of dep Man.
DIV11
Elimination of internal dividends - Man.
CONV
DIV21
Currency translation adjust. on dividends - Man.
CONV
PRO11
Elimination of internal impairment on investment - Man.
PK
PRO21
Elimination of internal provisions - Man.
PK
CONV
Consolidation entries
CONS01
Consolidation entry not splittable
CONS
CTA01
Currency translation adjustments - Equity - Man.
CONV
GW11
Booking of goodwill and bargain purchase - Man.
CONS
GW21
Currency translation adjust. on goodwill - Man.
CONS
INV11
Elimination of investments - Man.
CONS
INV21
Currency translation adjust. on investments - Man.
CONS
INV31
Adj. on gain/loss on disposal of a subsidiary, JV or associate (Local

currency)
PK
INV32
Adj. on gain/loss on disposal of a subsidiary, JV or associate

(Consolidation currency)
CONV
NCI11
Calculation of non controlling interests - Correction
CONS
Technical Audit-IDs
GW01
Disclosure of goodwill (gross value & impair.) and bargain purchase Man.
CFS01
Consolidated financial statements correction - Man..
PK
CONS
* PK : Package data (original currency). Using the Reporting currency of the entity is mandatory
CONV : Converted amount
CONS : Consolidated amount
A journal entry posted on an Audit ID that is loaded at the CONV or CONS amount level must be posted in
the consolidation currency. Otherwise, it is not taken into account.
39
Converting Data
Main Principles
Foreign subsidiary accounts are converted using the closing rate method:
The closing balances of balance sheet accounts are converted using the closing rate, except for
equity and consolidated investments kept at their historical value (see Converting Consolidated
Shareholders' Equity and Investments in Subsidiaries on page 85).
The income statement is converted using the average rate for the period
The cash flow statement is based on balance sheet variations which are converted at the average
rate for the period
The conversion is performed using the consolidation currency as specified in the consolidation definition.
The choice of the consolidation currency is not related to the base currency in the conversion rate
tables. The base currency is the currency with a value of 1 (see Entering and Updating Conversion
Rates on page 20).
For a given set of data and using the same conversion rate table, you can produce consolidated
accounts in different currencies by changing the consolidation currency in the consolidation definition.
The conversion difference is calculated automatically and assigned to the Currency translation adjustment
flow (F80). This flow corresponds firstly, to the difference between the opening and closing flows for the
opening data and secondly, to the difference between the average and closing rates for the periods
transactions.
Example
Extract from the conversion rate table (certain for uncertain 1EUR = x CUR):
Currency
Closing rate
Average rate,
current period
Average rate,
prior period
Opening
rate
EUR
CUR
0.20
0.25
0.286
0.333
Transition from package data to consolidated data (full consolidation method; consolidation in EUR):
Account
Amount level
Currency
F00
Opening
position
F20
Increase/
Purchase
F80
Curr. transl.
adjustment
F99
Closing
position
A1110 Lands and

buildings
Package
CUR
100
10
110
A1110 Lands and

buildings
Converted
EUR
300
(100/0.333)
40
(10/0.25)
210
(difference)
550
(110/0.20)
A1110 Lands and

buildings
Consolidated
EUR
300
40
210
550
F80 can also be calculated as follows:

Difference between opening and closing
rates at opening:
(100/0.20) (100/0.333) =
Difference between closing and average rates

for increase during the period:
(10/0.20) (10/0.25)
Total:
40
200
10
210
YTD and Periodic Conversion

Two conversion approaches are available in the Starter Kit. The difference lies in the method used to
process the movement flows that are converted at average rate.
YTD: A unique exchange rate is used for the period running from the beginning of the fiscal year to
the closing period.
Periodic: A different exchange rate is used for each period, that is, each month or quarter, which
enables to convert each periodic movement at the corresponding exchange rate.
Regardless of which conversion method you choose, the data entry in the package is still
made on a year-to-date basis.
The table below shows how to populate the exchange rate table, and highlights the difference between
year-to-date and periodic exchange rates. As explained before (see Entering and Updating Conversion
Rates on page 20), two rate versions (A-YTD and A-PER) are available in the Starter Kit.
st
Data entry period: September 2010 (the fiscal period starts on Jan 1 )
Consolidation frequency: Quarter
Rate version
Rate type
A-YTD (Year-to-date)
A-PER (Periodic)
ARPP - Average exch. rate, prior

period
[Not used]
Average rate April 1

th
to June 30
OR - Opening exch. rate, current

period
Rate at Jan 1
AR - Average exch. rate, current

period
Average rate Jan 1 to

th
Sept 30
CR - Closing exch. rate, current period
Rate at Sept 30
st
Rate at Jan 1
st
st
st
Average rate July 1

th
to Sept 30
th
Rate at Sept 30
st
th
Different sets of rules have been defined to handle the conversion options (YTD, Monthly or
Quarterly). You must always ensure that the Rate table and the Set of rules are you use are
consistent (see Defining a Consolidation on page 42)
When you decide to apply periodic conversion, the consolidations must be run in the correct
order. For instance, when you consolidate on a quarterly basis, you have to run the March 2010
consolidation before running the June 2010 consolidation, otherwise the data for June would not
be consistent.
Other conversion-related topics:
Conversion of equity and investments, including optional conversion process for F20/F40 using a
daily rate (see Consolidation Entries on page 77),
Conversion of the dividends paid (see Dividends on page 64).
41
Consolidation Processing
Defining a Consolidation
When creating a consolidation definition, some parameters are specific to the Starter Kit.
Properties Tab
The set of rules and the conversion rate version should be defined accordingly. The table below shows the
different options:
Conversion method
Set of rules
Conversion rate version
Year-to-date
A-YTD
A-YTD
Monthly
A-MCT
A-PER
Quarterly
A-QCT
A-PER
Note: if you opt for a periodic conversion method, the rate table for version A-PER must be populated in a
particular manner, that is, as defined before. Additionally, the way to enter periodic exchange rate is not the
same depending on your consolidation frequency.
Opening Balances Tab

The Starter Kit is configured to allow consolidation with opening balances. The opening balances are
automatically loaded at the beginning on the consolidation process.
You must define which consolidation should be used as Opening balances, the consolidation for the
previous fiscal year.
The source period should be equal to the data entry period of the consolidation to be used for the opening
balance data.
The three sets of rules defined above can be used both for consolidation with and without
opening balances.
Periods
Because the A-Actual category is mono-period, no specific parameter should be defined in this tab.
Filters
When creating a local GAAP consolidation definition, the audit ID filter AU2-IFRS - All except adjustment
to IFRS should be selected in order to consolidate only the data stored on the audit IDs included in the
filter (all except data stored on IFRS adjustments audit IDs).
Running a Consolidation Processing

There are two types of consolidation processing:
Full
Incremental: This includes only modifications made to packages and manual journal entries, and the
packages that were not yet integrated at this time.
An incremental processing does not take into account changes made to scopes, conversion
rates or tax rates, deletions of packages and changes to the configuration. To include all of these
modifications in the consolidation, you should run a full processing.
42
Retrieving and Checking Data

Data Retrieval Reports
The configuration offers a wide range of retrieval reports in the Report Navigator module which you can use
to check, analyze and publish the consolidated data.
These reports are organized into five folders:
C1 Annual report
Publishable financial statements and segment information
C2 Analysis
Reports for drilling down from the key financial statements
C3 Accounting reports
Balances, general ledgers and ledgers.
C4 Control reports
Reports for checking consolidated data and explaining the transition from package to consolidated
data.
C5 IFRS Adoption
Reports for comparing local gaap and IFRS.
You can check and publish the data as follows:
Check the data using the reports in folders C3, C4.
Produce and analyze publishable reports using reports in folders C1 and C2.
Checking Consolidated Data

This paragraph describes the reports you can use to check that the consolidated data is consistent.
These reports are grouped together in folder C4-Control reports and can be divided into three main
categories:
Consolidation control dashboard (book C-42)
Main balances (book C-42)
Conversion at spot rate (book C-43)
Controls on packages: opening balances, data integration, split by business units (book C-41)
We recommend that you systematically run the consolidation control dashboard reports
after each consolidation processing.
In general, errors can originate from:
Incorrect or incomplete data entry in packages. In this case, running the package controls in the
Package Manager module will enable you to detect and correct the error.
Incorrect data entry in the conversion rate table, such as an inconsistency between the opening rate
entered for data entry period N and the closing rate of the rate table used for the opening balance
data.
Manual journal entries that do not comply with the conventions in this configuration. For example,
unbalanced flows as described in Balancing Flows on page 15 (except for F00, F01 and F50 which
are checked by automatic controls).
43
Consolidation Control Dashboard

This report is a dashboard used to validate the consolidation by checking, for the entire Group:
That the assets equal the liabilities and equity on the balance sheet
That the flow analysis is consistent, e.g. the closing flow is equal to the sum of the opening flow and
variation flows, the balance sheet net income (flow F10) is equal to the income figure on the Income
statement, the cash flow statement is balanced.
That the clearing accounts for balancing consolidation entries are equal to zero or cancel each other
out at Group level.
You can use either the summarized version (C42-05) or the detailed version (C42-10).
If you detect an error, the link in the cell enables you to access the relevant report analyzed by reporting unit or
audit ID. These reports are described below.
Checking the Main Balances

These reports check that:
Assets are equal to liabilities in the balance sheet.
The net income on the balance sheet is equal to the net income on the income statement.
The balance conventions for certain flows are followed.
Assets are Equal to Liabilities

Run the following report:
Folder
Book
Schedule
C4
C42
C42-15 Assets = liabilities by Audit ID
This report is used to check that Assets equal Liabilities + Equity at opening and closing, and for the
aggregate movements of the fiscal year. It also enables you to check that the sum of the opening and
variation flows is equal to the closing flow.
This must be the case for every audit ID. If this is not the case, then run the report for the relevant audit IDs
by linking from C42-15:
Folder
Book
Schedule
C4
C42
C42-20 Assets = liabilities by Reporting Unit
The report identifies the relevant reporting units.

If the error originates from an audit ID other than PACK01 (package data entry), then link to the following
report:
Folder
Book
Schedule
C3
C33
C33-05 Debit Credit Ledger for 1 Reporting Unit and 1 Audit ID
The report identifies the journal entry numbers that contain errors.
You can also run the following report for the relevant Audit ID and Reporting Unit:
Folder
Book
Schedule
C3
C33
C33-10 Journal Entries for 1 Reporting Unit and 1 Audit ID
44
BS Net Income is Equal to P&L Net Income

The following report ensures that the net income of the balance sheet (stored on dedicated flow F10) is
equal to the net income of the income statement for every Audit ID:
Folder
Book
Schedule
C4
C42
C42-25 Balance Sheet income = P&L income by Audit ID
If there are differences, run the following report to identify the relevant Reporting Unit:
Folder
Book
Schedule
C4
C42
C42-30 Balance Sheet income = P&L income by Reporting Unit
Balancing Flows
Run the following report to ensure that the balance conventions have been followed for the flows (see
Balancing Flows on page 15):
Folder
Book
Schedule
C4
C42
C42-35 Flow balance by Audit ID
Flow should balance for every audit ID. In case of errors, run the following report by linking to it:
Folder
Book
Schedule
C4
C42
C42-40 Flow balance by Reporting Unit
This report highlights the reporting units for which flows do not balance.
Then link to the following report for these reporting units:
Folder
Book
Schedule
C3
C33
45
Making adjustments to individual accounts
Making adjustments to individual

accounts
Section Objectives
This section outlines:
Corrections made to packages
Adjustments booked at central site
Key Points
The manual adjustments described below are based on the following examples:
Processing differences for net income N-1
Correcting package data
Making fair value adjustments
Correcting Package Data

Correcting Differences for Net Income N-1
After company accounts have been sent to the Group and used for the consolidation, corrections may need
to be performed. As a result, there may be differences between the data sent and the modified data. You
can manage these differences in two ways during the next accounting period.
The recommended solution consists of taking these differences into account in the consolidation package.
The second solution consists of posting these differences in manual journal entries at central site. However,
this solution means that there should be no send condition set when sending the package. This is because
if the N-1 difference is not processed, this generates a variation flow F15 in net equity and this will
prevent the package from being validated. For this reason, the second solution is not recommended and
should be reserved for exceptional cases.
Regardless of the solution, local and consolidated data will balance only during period N+1. At the closing
of N, even if the amount of retained earnings is the same, the calculation of the net income (flow F10) will
differ between company and consolidated accounts.
Recommended Solution: Package Processing

Existing differences in N-1 net income can be processed as follows in the package:
The first solution consists of integrating the difference between the provisional N-1 net income and
the final N-1 net income in the net income for the period. In this way, the consolidation department
does not need to post any manual journal entry. However, it creates a discrepancy between local
data and the consolidation package on net income (flow F10).
The second solution consists of posting this difference in transfer flow F50 in order to impact
both reserves asset and liability items affected by the last journal entries of period N-1. In this
way, local data and the consolidation package will both balance at closing. However, this solution
requires the consolidation department to book this difference by manual journal entry.
These solutions are illustrated below:
46
After the package was sent, a correction was made to Sales.
The data entered in the package on 31/12/N-1 and the final data are shown below:
Package 31/12/N-1
Final accounts
Difference
(1)
(2)
(2) (1)
1 000
1 100
+ 100
E1610 Retained earnings / F10
600
660
+ 60
L2410 Current income tax

liabilities
400
440
+ 40
P1110 Revenues
1 000
1 100
+ 100
P5010 Income tax expense
- 400
- 440
- 40
Accounts
ASSETS
LIABILITIES
INCOME STATEMENT
At period N closing, we assume that:
No income has been entered during the period.
All of the net income for N-1 was allocated to retained earnings (scenario 1) or distributed (scenario 2).
All receivables and debts have been settled.
Booking the Difference in Net Income (Solution 1)

Data entry in package 31/12/N (scenario 1 no distribution)
The package for period N must contain the net income from N-1 that is not taken into account in Group
income.
The closing balance entered in the package in book P-A10 is shown below:
Accounts
Local 31/12/N
Package 31/12/N
660
660
660
660
P1110 Revenues
100
- 40
ASSETS
A2610 Cash on hand
= receivables (1100) debts (440)
LIABILITIES
E1610 Retained earnings
INCOME STATEMENT
Enter data in PA2500 to show variations in net equity:

ACCOUNTS
CODE
Retained earnings
E1610
Net equity
F00
F99
F06
F10
600
660
60
600
660
60
F20
F30
F40
F50
F55
Spec.
Control
47
Data entry in package 31/12/N (scenario 2 distribution of net income)
The closing balance entered in the package in book P-A10 is shown below:
Accounts
Local 31/12/N
Package 31/12/N
P1110 Revenues
100
- 40
LIABILITIES
INCOME STATEMENT

ACCOUNTS
CODE
Retained earnings
E1610
Net equity
F00
F99
F06
F10
600
-660
60
600
-660
60
F20
F30
F40
F50
F55
Spec.
Control
Further remarks
When the difference between final net income and local income is spread over small sums in a large
number of accounts in the income statement, the Group may authorize its subsidiaries to enter the
difference in other operating income/expense account.
Processing the Difference in Reclassification Flow F50 (Solution 2)
Data entry in package 31/12/N (scenario 1 no distribution)
The closing balance shows the company accounts. The impact from the last journal entries for period N-1 is
booked in flow F50.
ACCOUNTS
CODE
Retained earnings
E1610
Net equity
F00
F99
F06
F10
F20
F30
F40
F50
600
660
60
600
660
60
F55
Spec.
Control
F55
Spec.
Control
Enter data in flow F50 in PA3900 to show the impact of specific operations:
ACCOUNTS
CODE
Trade receivables, Gross
A2210
Cash on hand
A2610
F09
F70
F50
100
Assets
Retained earnings
100
E1610
60
Current income tax liabilities L2410
40
Equity and liabilities
100
Data entry in package 31/12/N (scenario 2 distribution of net income)

ACCOUNTS
CODE
Retained earnings
E1610
Net equity
F00
F99
F06
F10
F20
F30
F40
F50
600
-660
60
600
-660
60
Enter data in flow F50 in PA3900 to show the impact of specific operations:
48
ACCOUNTS
CODE
Trade receivables, Gross
A2210
Cash on hand
A2610
F09
F70
F50
100
Assets
100
Retained earnings
E1610
60
Current income tax liabilities L2410
40
Equity and liabilities
100
Journal entry to be posted at central site
The subsidiary should provide the consolidation department with information on the difference between the
provisional net income and final net income. Once the consolidation department has the breakdown by
item, they can then post the following journal entry:
Audit ID
Account
Flow
Debit
Credit
ADJ91
P1110 Revenues
Y99
F15
100
Y99
40
L2410 Current income tax liabilities
F15
40
F50
100
F50
40
F50
60
100
If this is not the case, then the journal entry should be posted in an other operating income or expense
account:
Audit ID
Account
Flow
Debit
Credit
ADJ91
P1210 Other income
Y99
F15
F50
100
F15
40
F50
40
F50
60
60
100
Alternative Solution: Manual Journal Entry Posted at Central Site

If the difference between the provisional net income and final net income is not processed in the package,
this results in the following data (example in scenario 1):
Closing balance
Accounts
Package 31/12/N
ASSETS
A2610 Cash and cash equivalents
660
LIABILITIES
660
49

ACCOUNTS
CODE
Retained earnings
E1510
F00
Net Equity
F99
F06
F10
F20
F30
F40
F50
F55
Spec.
Control
600
660
60
600
660
60
The package will not be able to reach control level LEV1 because the variation in net equity is not analyzed
completely.
At central site, the manual journal entry to be posted is as follows:
Audit ID
Account
Flow
Debit
ADJ91
P1110 Revenues
Y99
Y99
40
F15
60
Credit
100
If you do not know the breakdown by item for this difference, then the journal entry should be booked in
another operating income or expense account:
Audit ID
Account
Flow
ADJ91
P1210 Other income
Y99
F15
Debit
Credit
60
60
Other Package Corrections

Corrections in packages can be divided into several categories:
Corrections that should be taken into account in the package opening balance for the next period
and which include the following:
Errors in packages that do not affect local account, for example Partner errors in intercompany
declarations
Errors in local accounts that will be taken into account in the final financial statements
Errors in adjustments to Group accounting standards
Corrections that should not be sent in opening balances to packages for the next period
Correction journal entry that affects Group level only, for example Processing of certain
intercompany differences (see Intercompany Transactions on page 53)
Errors in local accounts that will only be taken into account in the N+1 financial statements
Corrections to be taken into Account in Package Opening Balances

The corrections to be made can be entered directly in the relevant reporting unit's package, using one of
the following Audit IDs, depending on what the error is due to:
PACK01 Package data
PACK11 Local adjustment to Group accounting policies
The package should then be validated by controls, published and reintegrated in the database.
It is also possible to post at the central level a journal entry that will impact the packages opening balance
for the next period. The Audit ID to use is PACK91-Package data - Central correction. It will be transferred
automatically to Audit ID PACK01 in the opening balances of next years package.
50
Other Package Corrections

Principles
If the corrections do not affect the package opening balances for the next period, then they should be
posted by manual journal entry using Audit ID ADJ91.
Examples
Corrections having an impact on net income for the period
The company has forgotten to book the sum of 100 from an invoice for the purchase of goods. This
expense which is tax deductible is posted in company accounts in period N+1.
The journal entry to be posted is as follows:
Audit ID
Account
Flow
Debit
ADJ91
P1120 Cost of sales
Y99
100
L2310 Trade payables
F15
L1410 Deferred income tax liability
F15
P5020 Deferred tax expense
Y99
Credit
Partner
Debit
Credit
100
100
100
40
40
Partner analysis:
By default, when you post a manual journal entry, transactions are concluded with
Third-parties (code TP-999). Transactions between companies within the Group should
be declared and the non-Group amount is then calculated automatically with the
difference.
Transfers between items

If you need to transfer an item between two accounts in the Income statement or in the Balance sheet, the
journal entry to post is as follows:
Audit ID
Account
Flow
ADJ91
Pxxxx Income/expense account
Y99
Pxxxx Income/expense account
Y99
A/L/Exxx Balance sheet account
F50
A/L/Exxx Balance sheet account
F50
Debit
Credit
Partner
Debit
Credit
X
X
X
X
Making Adjustments to Packages

Making Fair Value Adjustments
Principles
A fair value adjustment occurs when there is a difference between the accounting value of an incoming entity's
assets and their fair value.
The fair value adjustments are posted by manual journal entries, based on informati on that is
managed separately from the consolidation package.
51
Example
Scenario
When company Z was acquired, a building was valued at 1 000 whereas its net accounting value was 100.
The fair value adjustment was allocated to construction (+900). Construction items are amortized over a
period of 30 years according to Group accounting standards i.e. using a yearly allowance of 30 for the
revalued share.
Fair value adjustment at acquisition date (01/01/N):
Audit ID
Account
Flow
Debit
FVA11
A1110 Lands and buildings
F01
900
F01
Credit
900
Deferred income tax liability in fair value adjustment = 900 x 40% = 360:
Audit ID
Account
Flow
Debit
FVA11
F01
360
F01
Credit
360
Fair value adjustment: Period depreciation:

Audit ID
Account
Flow
FVA11
A1111 Lands and buildings, Dep.
F25
P1510 Other expenses *
Y99
Debit
Credit
30
30
* The choice of the P&L account depends on the destination of the depreciation expense.
Deferred tax in depreciation of fair value adjustment = 30 x 40% = 12:
Audit ID
Account
Flow
FVA11
Y99
F15
Debit
Credit
12
12
Presentation by flow
Account
Flow
Audit ID
Code
Description
F01
A1110
Lands and buildings
FVA11
A1111
Lands and buildings, Dep.
FVA11
E1610
Retained earnings
FVA11
900
F10
900
Deferred income tax liability
FVA11
<360>
52
<30>
<30>
<360>
12
Manual journal entry for booking fair value adjustments

Manual journal entry for booking depreciation
Manual journal entries for booking deferred taxes
900
<30>
360
F99
900
<30>
FVA11
L1410
F25
FVA11
FVA11
F15
12
<12>
348
Other Adjustments
Principles
The other adjustments include various journal entries that must be posted when the company's accounting
methods do not comply with Group policies.
These journal entries are booked using Audit ID ADJ91.
Example
To standardize the period of depreciation for software, journal entries, including deferred tax, should be as
follows:
Audit ID
Account
Flow
ADJ91
A1441 Computer software, Amort.
F20
P1510 Other expenses
Y99
A1710 Deferred tax assets
F15
Y99
Debit
Credit
Making IFRS Adjustments

Managing IFRS adoption in Financial Consolidation implies being able to move from the local GAAP to
IFRS at one date.
The starter kit for IFRS proposes a unified reporting model with a unique data entry package in which to
enter data according to local GAAP and IFRS and executing multiple consolidations (cf. IFRS Adoption in
Consolidated Statements Using SAP BusinessObjects Financial Consolidation 7.5, starter kit for IFRS)
Regarding transition period, local accounts are established on the basis of national accounting standards,
the entity has to make adjustments in order to ensure compliance with IFRS for the comparative data.
In that case, the standard audit ID PACK01 should be used in packages to enter data according to local
GAAP.
The starter kit provides specific audit IDs to track IFRS adjustments and to allow a full reconciliation
between local GAAP and IFRS. These adjustments can be entered at local level in the package or at
corporate level by manual journal entries.
Two options should be distinguished depending on the way data will be managed after the transition period:
-
Once the transition period has ended, the end-user decides that IFRS adjustment tracking is no
longer needed (IFRS becomes the local standard). In that case, amounts stored in IFRS
adjustment audit IDs should be carried forward into PACK01 audit ID, the following year.
If the end-user wants to keep tracking the changes between Local GAAP and IFRS after transition
is over, the IFRS adjustment audit ID should still be used.
At local level, two audit IDs can be used depending on the option chosen:
-
PACKIFRS11 Local adjustment to IFRS

Amounts collected on this audit ID during the year (Y), will be carried forward into audit ID
PACKIFRS11 the year after (Y+1)
PACKIFRS12 Local adjustment to IFRS Package data (Y+1)

Amounts collected on this audit ID during the year (Y) will be carried forward into audit ID
PACK01 the year after (Y+1).
53
Similarly, two audit IDs can be used at corporate level depending on the option chosen:
-
PACKIFRS91 Package data IFRS central correction

Amounts collected in this audit ID during the year (Y), will be carried forward into audit ID
PACK01 the year after (Y+1)
ADJIFRS91 IFRS adjustment Central

Amounts collected on this audit ID during the year (Y) will be carried forward into audit ID
ADJIFRS91 the year after (Y+1)
Manual journal entries posted on IFRS adjustment audit IDs will not be taken into
account in the local Gaap consolidated data thanks to the audit ID filter initialized in the
consolidation definition.
It is also possible to book IFRS adjustment at corporate level on standard audit IDs
(ADJ91, CTA01,) and to restrict manual journal entries to IFRS consolidated data by
selecting a variant restriction in the manual journal entries.
To know more about the IFRS adoption operating process, see IFRS Adoption in Consolidated
Statements on BusinessObjects / Financialconsolidation / 7.5 / Master Guides on http://help.sap.com/
Example Revaluation model for property, plant and equipment

Scenario
Company C uses the cost model for property, plant and equipment in its local accounts.
Period N+1, the company adopt IFRS and decides to use the revaluation model for property, plant and
equipment as permitted by IAS 16.
At opening, lands and buildings are revalued for 600 and during the period for 100.
IFRS adjustment at opening should be entered on flow F09 Change in accounting
policies to ensure a correct translation of the numbers (opening exchange rate apply to
flow F09).
For current year IFRS adjustements, the appropriate movement flow should be used
(F15, F20, F55).
A tax rate of 30% applies for deferred tax.

In this example, IFRS adoption is managed at corporate level and IFRS adjustment tracking is no longer
needed at the end of the transition period.

Revaluation of lands and buildings at the beginning of the period N+1
Audit ID
Account
PACKIFRS91 A1110 Lands and buildings
54
Flow
Debit
F09
600
F09
E1511 Income tax on revaluation surplus
F09
F09
Credit
600
180
180
Revaluation of land and buildings during the period N+1

Audit ID
Account
PACKIFRS91 A1110 Lands and buildings
Flow
Debit
F55
100
F55
E1511 Income tax on revaluation surplus
F55
F55
Credit
100
30
30
55
Intercompany Transactions
Section Objectives
This section outlines:
how intercompany declarations can be checked
the automatic processing for eliminating intercompany transactions
manual journal entries that may be required
Key Points
Intercompany transactions may be classified as follows:
Current acquisition/disposal and borrowing/lending transactions that do not have an impact on

Group income. These will be called reciprocal transactions.
Transactions that generate internal income such as disposal of assets or payment of dividends.
The following are eliminated automatically:
reciprocal transactions
dividends
provisions
internal disposal of assets or investments
Suggested Approach
1. Run an intercompany reconciliation.
2. Analyze first the balances then the flows for the intercompany reconciliation.
3. Check that internal transactions are eliminated correctly.
Checking Intercompany Declarations

Running Intercompany Reconciliations
You can reconcile intercompany data using the data entered in packages that may be corrected by manual
journal entry and then converted to the consolidation currency.
56
Reconciliations
Balance Sheet
GROUP OF ACCOUNTS
Non-current receivables/payables
ASSETS
LIABILITIES
A1620 Receivables on disposal of PPE,

NC, Gross
L1310 Debts on purchase of PPE, NC

L1311 Debts on purchase of intangible
assets, NC
A1621 Receivables on disposal of

intangible assets, NC, Gross
L1312 Debts on purchase of inv. in

subsidiaries, NC
A1622 Receivables on disposal of inv. in

subsidiaries, NC, Gross

other entities, NC

other entities, NC, Gross

other assets, NC

other assets, NC, Gross
L1320 Other payables, NC
A1630 Other receivables, NC, Gross

Non-current financial assets and
liabilities
A1610 Loans and cash advances, Non

current, Gross
L1550 Other financial liabilities, Non

current
Trade receivables / payables
Current receivables/payables on
disposal of assets
A2220 Receivables on disposal of PPE,

Current, Gross
L2320 Debts on purchase of property,

plant and equipment, Current
A2221 Receivables on disp. of intangible

assets, Current, Gross
L2321 Debts on purchase of intangible

assets, Current
A2222 Receivables on disp. of inv. in

subsidiaries, Current, Gross
L2322 Debts on purchase of

investment in subsidiaries, Current

other entit., Current, Gross

investment in other entities, Current

other assets, Current, Gross

investment in other assets, Current
Dividends receivable/payable
A2230 Dividends receivable
L2330 Dividends payable
Other receivables/payables
A2240 Other receivables, Current, Gross
L2340 Other payables, Current
Accrue interests receivables/payables A2250 Accrued interests on receivables
L2350 Accrued interests on financial

liabilities and payables
Current financial assets and liabilities
L2570 Other financial liabilities,

Current
A2440 Loans and cash advances,

Current, Gross
Net Income (Excluding Dividends and Internal Transfer of Assets)

GROUP OF ACCOUNTS
INCOME
EXPENSES
Sales / Cost of sales
P1110 Revenues
P1120 Cost of sales
Other operating income and

expenses
P1210 Other income
P1310 Distribution costs

P1410 Administrative expenses
Financial income and expenses
P2120 Interest income
P2220 Interest expenses
P2150 Other financial income
P2230 Other financial expenses
57
Internal Transfer of Assets

GROUP OF ACCOUNTS
Property, plant and equipment
RELEVANT ASSET ACCOUNTS

A1110 Lands and buildings
A1120 Tangible exploration and evaluation assets
A1130 Fixtures and fittings
A1150 Office equipment
A1160 Vehicles
A1170 Machinery
A1180 Other property, plant and equipment
Investment property
A1210 Investment property
Intangible assets
A1410 Brand names

A1420 Intangible exploration and evaluation assets
A1430 Mastheads and publishing titles
A1440 Computer software
A1450 Licences and franchises
A1460 Patents, trademarks and other rights
A1470 Recipes, formulae, models, designs and prototypes
A1490 Other intangible assets
Biological assets
A1510 Biological assets
Investments
Non-current financial assets
A1820 Available-for-sale financial assets, Non current

A1840 Financial assets at fair value through profit or loss, NC
A1850 Other financial assets, Non current
Current financial assets
A2410 Available-for-sale financial assets, Current

A2430 Financial assets at FV through profit or loss, Current
A2450 Other financial assets, Current
Dividends
GROUP OF ACCOUNTS
Dividends received/paid
BENEFICIARY
P2140 Dividends
DISTRIBUTOR
XE1610 Dividends paid
Prior to Running Intercompany Reconciliations

You can run an intercompany reconciliation once you have integrated the consolidation packages and
converted the package data from foreign subsidiaries to the consolidation currency. In order to do this, first
run a consolidation processing.
You can run a consolidation processing:
for the Group as described earlier (see Defining a Consolidation on page 42)
just to convert the data, which requires a shorter processing time
To run this simplified processing, create a new consolidation definition (using a specific variant) and select
no set of rules in the consolidation definition.
58
Displaying Intercompany Reconciliation Reports

Intercompany reconciliation reports are grouped together in book C44:
Reciprocal
transactions
Balance sheet
C44-10 Balance Sheet reconciliations at

closing: Buyer/Seller
C44-15 Balance Sheet reconciliations
by flow: Buyer/Seller
Income
statement
C44-20 Profit & Loss reconciliations

(threshold > 1)
C44-25 Profit & Loss reconciliations:
Buyer/Seller
Internal income Dividends

Disposal of
assets
Sales of
investments
C44-05 Balance Sheet and

Profit & Loss reconciliations at
closing
C44-30 Reconciliation of
internal gains & losses &
dividends (threshold > 1)
C44-35 Reconciliation of
C44-40 Reconciliation of internal gains internal gains & losses &
& losses on sale of investment in
dividends: Buyer/Seller
subsidiaries
When you initialize a reconciliation report for a buyer/seller pair (for instance, C44-25)
you will find two initialization blocks, with both the Buyer and Seller dimensions in each.
This is because in a pair of reporting units, each unit may be both the buyer for one
intercompany transactions and the seller for another one.
To retrieve all the intercompany reconciliation data for pair (RU1, RU2) in the report,
you should initialize the two blocks as follows:
Block 1 : Buyer = RU1, Seller = RU2
Block 2 : Buyer = RU2, Seller = RU1
Correcting Differences
Principles
There are two types of differences arising from intercompany transactions:
Differences due to errors made when declaring data in packages. These may or may not affect
company accounts.
Differences that are justified, like non mature discounted notes and conversion differences.
If there is an error in the package, you can correct it in different ways depending on the type of error:
A simple declaration error, for example you declare a receivable with partner U1 whereas it should
be with partner U2.
A declaration error due to an accounting error, for example you forget to book an invoice issued by partner
U1, which will be corrected in the final version of the company accounts.
An accounting error which will be corrected in the company accounts only in fiscal period N+1.
In the first two cases, the correction to be made must be taken into account in the package opening
balances for period N+1. It must be performed manually in the package for fiscal period N.
If you make corrections directly in the package, it must be validated and then integrated so that the
correction can be taken into account (see Integrating Packages on page 24 ).
H
In the last case, the correction will not have any impact on the package opening balances and so should be
booked by manual journal entry using audit ID ADJ91.
59
Justified differences (discounted notes, conversion differences, etc.) should be booked by manual journal
entry using audit ID ADJ91.
Examples
Invoice that was not Booked
Running the reconciliation report
The reconciliation of intercompany transactions declared by reporting units U1 and U2 is shown below:
Reconciliation
rule
Buyer
Reciprocal
trade
receivables
and payables
U2
Seller
Flow
Account
Audit ID
Buyer
amount
local
currency
F00
L2310
PACK01
800
F00
A2210
PACK01
F15
L2310
PACK01
F15
A2210
PACK01
U2
Buyer
amount
converted
currency
Seller
amount
converted
currency
Difference
800
800
800
U1
TOTAL
Reciprocal
gross profit
accounts
Seller
amount
local
currency
1 000
3 000
1 800
Y99
P1120
PACK01
Y99
P1110
PACK01
1 000
3 800
10 000
3 000
1 800
3 800
2 000
10 000
U1
TOTAL
12 000
10 000
12 000
12 000
10 000
12 000
2 000
After investigating this report, you see that these differences are due to U2's omission in booking an invoice
issued by U1 for the sum of 2 000. This error is not considered as being significant and will be corrected in
U2's company accounts only in fiscal period N+1.
Manual journal entries to be posted by U2
The invoice issued by U1 for U2 must be booked in the consolidated accounts:

Audit ID Account
Flow
Debit
ADJ91
P1120 Cost of Sales
Y99
2 000
F15
Credit
2 000
Partner breakdown
Code
Debit
U1
2 000
U1
Credit
2 000
This additional expense posted in U2's accounts should lead to the booking of a deferred tax asset
(hypothetical tax rate of 40%):
Audit ID
Account
Flow
Debit
ADJ91
F15
800
Y99
60
Credit
800
Discounted Notes not yet Matured

Running the reconciliation report
The reconciliation of intercompany transactions declared by reporting units U1 and U2 is shown below:
Reconciliation
rule
Buyer
Seller
U2
U1
Reciprocal
trade
receivables
and payables
Reciprocal
gross profit
accounts
Flow
Account
Audit ID
Buyer
amount
local
currency
F15
L2310
PACK01
1 000
F15
A2210
PACK01
TOTAL
U2
P1120
PACK01
Y99
P1110
PACK01
Buyer
amount
converted
currency
Seller
amount
converted
currency
Difference
1 000
0
1 000
Y99
Seller
amount
local
currency
1 000
12 000
-1 000
12 000
U1
TOTAL
12 000
12 000
12 000
12 000
12 000
12 000
The difference seen in the reconciliation of receivables and debts is due to the fact that U1 has discounted
receivables from U2.
To balance intercompany declarations, you should post a journal entry for U1:
Audit ID Account
Flow
Debit
ADJ91
F15
1 000
L2510 Borrowings, Current
F15
Credit
Partner breakdown
Code
Debit
U2
1 000
Credit
1 000
Elimination of Internal Transactions

Elimination of Reciprocal Transactions
Principles
Definition
Reciprocal transactions are transactions between companies in the Group (acquisition/disposal or
borrowings/lendings) whose elimination will have no impact on the income of the consolidated companies.
Summary
Relevant companies
Amount level
Audit IDs taken into account
Generated audit IDs
Manual audit ID for corrections
Full and proportionate consolidation

Converted
All audit IDs at converted level except ELIM10 and ELIM11
ELIM10
ELIM11
Description of the Processing

Reciprocal accounts and adjustment accounts are eliminated against a link account for partners that are
fully or proportionately consolidated. When the transaction involves:
a fully consolidated company and another consolidated using the proportionate method, elimination
is based on the latter's consolidation rate.
two companies consolidated using the proportionate method, elimination is based on the lowest
consolidation rate.
61
The link accounts are as follows:

RELEVANT ELIMINATIONS
Receivables and payables,
Non current
GROUP OF RECONCILED ACCOUNTS

A1620 Receivables on disposal of PPE, Non Current, Gross
ELIMINATION
ACCOUNTS
L13CL
A1621 Receivables on disposal of intangible assets, NC, Gross

A1622 Receivables on disposal of inv. in subsidiaries, NC, Gross
A1623 Receivables on disposal of inv. in other entities, NC, Gross
A1624 Receivables on disposal of inv. in other assets, NC, Gross
A1630 Other receivables, Non current, Gross
L1310
Debts on purchase of PPE, Non current
L1311
Debts on purchase of intangible assets, Non current
L1312
Debts on purchase of inv. in subsidiaries, Non current
L1313
Debts on purchase of inv. in other entities, Non current
L1314
Debts on purchase of inv. in other assets, Non current
L1320
Other payables, Non current
Financial assets and liabilities,

Non current
A1610 Loans and cash advances, Non current, Gross
Receivables and payables
L1550
L15CL
Other financial liabilities, Non current

L23CL
A2220 Receivables on disposal of PPE, Current, Gross

A2221 Receivables on disp. of intangible assets, Current, Gross
A2222 Receivables on disp. of inv. in subsidiaries, Current, Gross
A2223 Receivables on disp. of inv. in other entit., Current, Gross
A2224 Receivables on disp. of inv. in other assets, Current, Gross
A2230 Dividends receivable
A2240 Other receivables, Current, Gross
A2250 Accrued interests on receivables
L2310
Trade payables
L2320
Debts on purchase of property, plant and equipment, Current
L2321
Debts on purchase of intangible assets, Current
L2322
Debts on purchase of investment in subsidiaries, Current
L2323
Debts on purchase of investment in other entities, Current
L2324
Debts on purchase of investment in other assets, Current
L2330
Dividends payable
L2340
Other payables, Current
L2350
Accrued interests on financial liabilities and payables
Financial assets and liabilities,

Current
A2440 Loans and cash advances, Current, Gross
Gross profit
P1110 Revenues
L2570
L25CL
Other financial liabilities, Current

P11CL
P1120 Cost of sales

Operating profit
P1210 Other income
P15CL
P1310 Distribution costs

P1410 Administrative expenses
Financial result
P2120 Interest income

P2150 Other financial income
P2220 Interest expenses
P2230 Other financial expenses
62
P22CL
Example
Source data
Package for U1 schedule PA4110 (in EUR)

ACCOUNTS
PARTNERS
Revenues
N-1
P1110
RU U2
500
Non-Group TP-999
2500
Total Revenues
3 000
Package for U2 schedule PA4110 (in EUR)

ACCOUNTS
PARTNERS
Cost of Sales
N-1
P1120
RU U1
- 500
Non-Group TP-999
-300
Total Cost of Sales
-800
Automatic journal entries generated

U1 P1110 Revenues
Audit ID
Part.
PACK01
U2
ELIM10
U2
U2 P1120 Cost of Sales
500
500
U1 P11CL - Intercompany eliminations

(Cost of Sales)
Audit ID
Part.
ELIM10
U2
500
Balance
500
Audit ID
Part.
PACK01
U1
ELIM10
U1
500
500
U2 P11CL - Intercompany eliminations

(Cost of Sales)
Audit ID
Part.
ELIM10
U1
500
500
Intercompany elimination for U1

Intercompany elimination for U2
Performing Checks
Run the following reports to check that the link accounts are balanced for the Group:
Folder
Book
Schedule
C4
C42
C42-10 Consolidation control dashboard (detail)
If this is not the case, then run one of the following reports to identify the relevant reporting units:
Folder
Book
Schedule
C4
C42
C42-45 Check clearing accounts for intercompany elimination

C42-50 Check clearing accounts for intercompany elimination: buyer/seller
63
Dividends
Presentation of the Automatic Processing
Introduction
The automatic processing consists of eliminating the beneficiary's financial income against consolidation
reserves.
Use the following audit ID:
Processing
Automatic Audit IDs
Manual Audit IDs
Elimination of inter-company dividends
DIV10
DIV11
Currency translation adjustment on dividends
DIV20
DIV21
The following options apply:
Dividends paid (flow F06) are converted using the daily exchange rate type corresponding at the
date of distribution entered in the package (see Dividends on page 58).
Dividends are calculated for non-controlling interests based on the opening rate.
Collecting Data in the Package

Dividends paid:
Dividends paid out from net equity are entered in schedule PA2500-Equity statement, using technical
account XE1610.
Dividends paid are analyzed in greater detail in schedule PA4320-Dividends paid. This schedule presents
the dividends paid per beneficiary, including the share paid out to non-Group shareholders.
By default, dividends paid are converted using the average rate of the period. In order to convert them
using the spot rate at the distribution date, the paying company should entered data in schedule PA4330
Dividends paid by beneficiary /date. At central site, daily rate for the dates of distribution should be entered
in the conversion rates table.
Dividends received:
Dividends received are booked in account P2140-Dividends. They are analyzed by partner in schedule
PA4310-Dividends Received.
Conversion Principles
Flow F06-Dividends is converted by default at average rate of the period. If analysis of dividend paid by
beneficiary and by date is entered in the package and the corresponding daily rate is populated in the rates
table used for the consolidation, then the paid dividend will be converted using the rate at the distribution
date.
The dividends received (account: P2140) are converted using the average rate for the period like any other
item of the Income statement.
64
Journal Entries
The automated elimination of the internal dividends is processed in two stages:
The dividends is eliminated from the Parents accounts, based on the declaration made by the
subsidiary on account XE1610, using Audit ID DIV10:
Journal entry generated
Source data
Subsidiary (distributor):
XE1610 Dividends paid - Flow F06
Debit
Credit
P2140 Dividends
Y99
E1610 Retained
earnings F06
Then the difference between the dividend received and the dividend paid, for each
distributor/beneficiary pair, is eliminated against the Retained earnings, using Audit ID DIV20:
Journal entry generated
Source data
Parent (beneficiary):
P2140 Dividends Y99
Debit
Credit
P2140 Dividends
Y99
E1610 Retained
earnings F80 *
* This amount will be transferred later to the Foreign currency translation reserve by the currency
translation adjustment automatic processing.
To explain in detail the purpose of this second automated journal entry, we can distinguish several cases
depending on the distributor and beneficiarys currency:
Reporting currencies *
Analysis
Distributor (D)
Beneficiary (B)
There should not be any conversion difference (provided that the reciprocal
declaration match).
CCUR
Dividend received should be booked in Bs accounts using exactly the same

rate used to convert flow F06 in Ds accounts.
FCUR1
CCUR
A conversion difference may originate from converting dividend received at

the average rate, while dividend paid is converted at the exact exchange rate.
It is transferred to the retained earnings by an automatic journal entry posted
on Audit ID DIV20.
FCUR1
FCUR1
If there is a difference, it should be cancelled against the financial result

(P2150 Other financial income) by a manual journal entry posted in Bs
accounts.
FCUR2
In this scenario, which combines the two scenarios above, the process should
be as follows:
1. Check that the dividend received by B (in FCUR2) corresponds to the
dividend paid by D (in FCUR1), converted using the spot rate on F06.
2. The remaining difference will be transferred to the retained earnings by
an automatic journal entry posted on Audit ID DIV20.
* CCUR : Consolidation currency

FCUR : Foreign currency
65
Example
Scenario
The group holds 100% of F1 and F2, which are foreign subsidiaries located in the same country. The
conversion rates for F1 and F2's currency, expressed as certain for uncertain, are as follows:
OR
AR
CR
Opening
rate
Average
rate
Closing
rate
June 30th
0.250
0.270
0.200
0.286*
Daily rate
* Spot rate at the date the dividend was decided by the general meeting
Data entered by F2 in schedule PA4320-Dividends paid

F06
XE1610 Dividends paid
100
To be broken down
Parent
F1
100
TOTAL
100
Data entered by F2 in schedule PA4330-Dividends paid by beneficiary /date

F06
Owner company F1
100
XE1610 Dividend paid To be

broken down
Transactrion date
June 30th
100
TOTAL
100
Data entered by F1 in schedule PA4310-Dividends received

N-1
P2140 Dividends
N
100
To be broken down
Subsidiary
F2
100
TOTAL
100
Automatic journal entries generated for F1

P2140 Dividends
PACK01
370 (=100 /0.270)
DIV10
350
DIV20
20

DIV10
350
DIV20
20 *
Elimination of the dividend received based on the declaration made by F2 (100 CUR / 0.286)
Processing the conversion difference between dividends received (100 CUR / 0.270) and dividends paid (100 CUR / 0.286 = 350)
*
This amount is transferred later to the Foreign currency translation reserve.
Performing Checks
Checking Consistency between conversion rate table and analysis by date of paid dividend
You can check that daily rates corresponding to analysis by date entered in the packages have been
populated by running the following report:
Folder
Book
Schedule
C4
C43
C43-05 Checking consistency between analysis by date Daily exchange rate
66
The C43-10 report enables you to check the conversion of paid dividends by identifying missing analysis by
date of paid dividend and/or missing daily exchange rates.
Folder
Book
Schedule
C4
C43
C43-10 Checking the conversion of paid dividend
Checking Declarations
You can check that the declarations made by the distributor using flow F06 on account XE1610 and by the
beneficiary using flow Y99 on account P2140 are reciprocal by running the following reports in book C44:
Folder
Book
Schedule
C4
C44
C44-30 Reconciliation of internal gains & losses & dividends (threshold > 1)
Checking Elimination Journal Entries

Checking the impact on the income statement
Run the following report to check that the amounts in account P2140 correspond to dividends received from
non-Group partners for each reporting unit:
Folder
Book
Schedule
C4
C46
C46-15 Elimination of dividends - Impact on P&L
This report also enables you to know the amount of the conversion difference that was posted automatically
on account P2140, for each beneficiary/distributor pair. Make sure that it is real (justified) conversion
difference and that it is not due to another cause, such as an inconsistency in intercompany declarations.
Checking the distribution flow for shareholders' equity
Run the following report to check that there is no discrepancy between dividends received and paid:
Folder
Book
Schedule
C4
C46
C46-20 Elimination of dividends - Check distribution flow (F06)
If there are discrepancies, check the rows analyzed by reporting unit pair so that you can identify the origin
of the problem.
Provisions
Automatic Processing
Introduction
Provisions for consolidated companies are fully eliminated regardless of the:
consolidation method of each company, for example the full or proportionate consolidation or equity
method.
audit ID of the provision, for example the provisions on shares or other provisions.
The audit IDs used are as follows:

Processing
Automatic Audit IDs
Manual Audit IDs
Elimination of inter-company prov. on shares
PRO10
PRO11
Elimination of other inter-company provisions
PRO20
PRO21
67

Provisions are broken down by partner in schedules:
PA2200: impairment on investments in subsidiaries
PA4410: intercompany provisions on bad debts,
P4420: intercompany provisions (liabilities).
Journal Entries
Elimination of intercompany provisions is performed against:
The income statement for allowances and write-back flows as well as for variation flow F15.
Net equity for the following flows: incoming units (F01), reclassification (F50), change of accounting
policies (F09), internal mergers (F70), conversion difference (F80), outgoing units (F98) and the
opening flow (F00) for consolidations without opening balances.
The table below describes accounts and flows from which processing originates and their counterparty in
income:
Balance sheet
source flow
Balance sheet account

A1812 Investments in subsidiaries, JV and
associates, Impair.
F25/F15
A1612 Loans and cash advances, Non current, Allow.
Income statement account
Audit ID
P2210 Allowances for provisions on

shares
PRO10
F25/F35/F15
P1650 Net internal provision
PRO20
F25/F35/F15
PRO20
A1642 Receivables, Non current, Allow

A2212 Trade receivables, Allow. for bad/doubt. debts
A2262 Other receivables, Allow. for bad/doubt. debts
A2442 Loans and cash advances, Current, Allow.
L1230 Legal proceedings provision, Non current
L1260 Miscellaneous provisions, Non current
L2230 Legal proceedings provision, Current
L2260 Miscellaneous provisions, Current
Example
Source data
Schedule PA4420
ACCOUNT/PARTNER
Code
Miscellaneous provisions, L1260

Non current
F00
F99
F25
150
F35
300
250
U2
100
50
TP-999
200
200
150
-150
300
250
150
-200
F50
F60
F20
F30
F70
Control
-200
To be broken down
RU U2
Non-Group
Total
-50
Schedule PA2500
ACCOUNTS
Retained earnings
Net equity
68
CODE
E1610
F00
F99
F05
F10
-300
-250
50
-300
-250
50
F40
F50
F55
Spec.
Control

L1260 Miscellaneous provisions, Non current
PACK01
250
PRO20
100
PACK01
PRO20

300
PRO20
50
100

PACK01
50
PRO20
50
Elimination of provision at opening

Elimination of write-back for provision for the period
Account
Flow
Audit ID
Code
E1610
Description
Retained earnings
F00
F10
PACK01
<300>
50
<250>
PRO20
100
<50>
50
<200>
<200>
TOTAL
L1260
Miscellaneous provisions, Non

current
PACK01
300
PRO20
<100>
TOTAL
F20
150
200
Total LIABILITIES & EQUITY

P1650
F15
Net internal provision
F35
F99/Y99
<200>
250
50
<50>
150
<150>
200
150
<150>
PACK01
50
PRO20
<50>
If applicable, the deferred tax will be posted by a manual journal entry, as follows:
Deferred income tax liability for the elimination of the provision at opening: 100 x 40% = 40
Audit ID
Account
Flow
Debit
PRO21
F00
40
F00
Credit
40
Write-back of deferred income tax liability amounting to 50 x 40% = 20

Audit ID
Account
Flow
Debit
PRO21
F15
20
Y99
Credit
20
Performing Checks
Open the following reports and identify the provision accounts (assets and liabilities):
Folder
Book
Schedule
C3
C31
C31-05 Balance Sheet by Flow
69
Then link to the following report:

Folder
Book
Schedule
C3
C32
C32-05 General ledger by Audit-ID, partner, JE number (flows)
For each account, use the detail by partner or share to check that any intercompany amount is eliminated
at 100%.
Gains or Losses on Internal Transfer of Assets

Presentation of the Automatic Processing
Introduction
Gains or losses on disposal of assets (tangible, intangible or securities) between consolidated companies
are eliminated:
At 100% when the buyer and seller are both fully consolidated.
Using the consolidation rate of the company that is proportionately consolidated if its partner is a
fully consolidated company.
Using the lowest consolidation rate if both buyer and seller are consolidated using the proportionate
method.
These concepts are summarized below:

Buyer
Seller
Full consolidation (FC)
Proportionate consolidation (PC)
Full (FC)
Proportionate (PC)
100%
Consolidation rate of PC
Consolidation rate of PC
Lowest consolidation rate

Acquisitions and disposal of assets can be analyzed in specific reports:
Schedule PA4210 Purchase / Disposal of Property, Plant and Equipment
Schedule PA4220 Purchase / Disposal of Investment Property
Schedule PA4230 Purchase / Disposal of Intangible Assets
Schedule PA4240 Purchase / Disposal of Biological Assets
Schedule PA4250 Purchase / Disposal of Financial Assets
Schedule PA2300 Purchase / Disposal of investment in subsidiaries
In these reports, the seller breaks down amounts by type of asset or by investment row for securities and
by buyer:
The selling price is entered in flow X01.
The gains or losses are calculated based on the amounts declared on flow F30, both on the gross
value accounts for tangible, intangible assets and investment property and the accumulated
depreciation and impairment accounts.
The buyer breaks down amounts by type of asset or by investment row for securities, and by seller, using
flow F20.
For the purchase/disposal of investment in subsidiaries, an additional, optional schedule is available:
PA2350-Purchase/disposal of investment in subsidiaries / Date. Use this schedule if you choose to declare
F20 on investment by dates.
70
Journal Entries
Gains or losses on internal transfers of assets are eliminated from the income of the seller company. In the
buyer company the assets must be recorded at their historical value. The historical value is used in the
buyer's accounts to show the same gross value and cumulated depreciation for the asset as in the seller's
accounts at the date of disposal.
Data entered
At seller's
at seller's
Debit
At buyer's
Credit
Debit
Credit
Gross value account
A11CL
Property, plant and equipment

Gross value (F30)
Depreciation (F30)
Impairment (F30)
Sales price (X01)
A11CL Clearing account Property, plant and

equipment
P1610
Depreciation account
P1610 Gains or losses on

sale of property, plant and
equipment
A11CL
A11CL
Impairment account
Gross value account
Investment property
Gross value (F30)
A12CL Clearing account Investment property
P1611
Gross value account
Depreciation (F30)
Impairment (F30)
A12CL

sale of investment property
A12CL
A12CL
Sales price (X01)
Impairment account
Gross value account
Intangible assets
Gross value (F30)
A14CL Clearing account Intangible assets
P1612
Gross value account
Depreciation (F30)
Impairment (F30)
A14CL

sale of intangible assets
A14CL
A14CL
Sales price (X01)
Impairment account
Gross value account
Biological assets
Gross value (F30)
A15CL Clearing account Biological assets
P1613
Gross value account
Depreciation (F30)
Impairment (F30)
A15CL

sale of biological assets
A15CL
A15CL
Sales price (X01)
Impairment account
Gross value account
Non-current financial assets

Gross value (F30)
A18CL Clearing account Financial assets, Non current
P1614
Gross value account
A18CL
Sales price (X01)

sale of other assets
A18CL
A18CL
Gross value account
Current financial assets

Gross value (F30)
A24CL Clearing account Financial assets, Current
P1614
Gross value account
A24CL
Sales price (X01)

sale of other assets
A24CL
A24CL
Gross value account
71

Data entered
At seller's
at seller's
At buyer's
Debit
Credit
Debit
Credit
Consolidated investment in subsidiaries, JV and associates

Gross value (F30)
Impairment (F30)
Sales price (X01)
A181CL Clearing account Inv. in subsidiaries, JV and

associates
P1615
Gross value account

sale of shares
A181CL
A181CL
A181CL
Impairment account
Gross value account

Processing
Automatic audit ID
Manual audit ID
DIS10
DIS11
Elimination of gains and losses on internal

transfer of assets
Correction of the amort./impairment subsequent
to an internal transfer of assets
DIS11
Example
Company U1 has sold a building to U2 for 600. In U1s accounts, this building had a gross value of 900 and
an accumulated depreciation of 400 at the date of the internal transfer.
Data entered by U1 in schedule P10450
DISPOSAL
ACCOUNT/PARTNER
Lands and buildings
CODE
Selling
price
Gross
value
Depr.
Impair.
PURCHASE
Net book
value
Gains/
losses
A1110
600
-900
400
-500
100
U2
600
-900
400
-500
100
600
-900
400
-500
100
Acquisition
price
To be broken down
RU U2
Total
Data entered by U2 in schedule P10450

DISPOSAL
PARTNER
Lands and buildings
CODE
Selling
price
Gross
value
Depr.
Impair.
PURCHASE
Net book
value
Gains/
losses
Acquisition
price
A1110
600
U1
600
To be broken down
RU U1
Total
72
600

U1 P1610 Gains or losses on sale of PPE
PACK01
100
DIS10
100
U1 A11CL Clearing account - PPE

DIS10
100
U2 A11CL Clearing account - PPE
U2 A1110 Lands and buildings

PACK01
DIS10
600
DIS10
100
U2 A1111 Lands and buildings, Dep.

DIS10
400
300
Elimination of gains at seller's

Adjustment to asset's historical value at buyer's
Account
Code
A11CL
A1110
A1111
E1610
P1610
Description
Clearing account - PPE
Lands and buildings
Lands and buildings, Dep.
Retained earnings
Gains or losses on sale of PPE
Flow
Reporting
unit
Audit ID
U1
DIS10
U2
DIS10
U1
PACK01
U1
DIS10
U2
PACK01
600
U2
DIS10
<600>
U1
PACK01
U1
DIS10
U2
DIS10
U1
PACK01
100
100
U1
DIS10
<100>
<100>
U1
PACK01
100
U1
DIS10
<100>
F00
F10
F20
F50
F99/Y99
<600>
500
<100>
600
<500>
100
900
F30
<900>
900
<400>
0
<900>
0
600
900
400
300
0
<400>
400
<400>
<400>
Performing Checks
Checking Declarations
Check that the declarations made by sellers (selling price in technical flow X01) and buyers (purchase price
in F20) are reciprocal by running the following report:
Folder
Book
Schedule
C44
C44-30 Reconciliation of internal gains & losses & dividends (threshold > 1)
If this report displays any differences due to an error in the breakdown by partner for sales and purchases;
the declaration must be corrected directly in the package, which must then be validated and integrated
again into the database.

When an internal transfer of assets occurs, the depreciation booked in the buyers accounts must be
corrected in order to take due account of the adjustment to historical value in the consolidated accounts.
73
Example (continued)
Following with the previous example, we suppose that:
In U2's company accounts, the asset is depreciated over 6 years, with a yearly allowance of 100.
In U1's company accounts, the asset would have been depreciated at a rate of 33.33%, with a
theoretical allowance of 300 in N and 200 (residual value) in N+1.
For the consolidation of fiscal year N, the manual journal entry to be posted for U2 is as follows (assuming
that the depreciation of the building comes under Other expenses:
Audit ID
DIS11
74
Account
Flow
A1111 Lands and buildings, Dep.
F25
Y99
Debit
Credit
200
200
Deferred Taxation
Deferred Taxation
Section Objectives
This section presents the processing of deferred tax in the Starter kit.
Key Points
Deferred tax must be entered in the package or booked manually by the consolidation department. There is
no automated process applying to deferred tax.
Any deferred tax journal entry must be booked on the same Audit ID as the one used to identify the base of
deferred tax (or the corresponding Audit ID on which you can book a manual journal entry).
Overview
Identifying the Bases of Deferred Tax
The bases of deferred tax can be split into two categories:
Deferred tax based on adjustments already included in the package using Audit ID PACK01 (such
as an IFRS adjustment) should be booked in the package
Deferred tax based on adjustments posted centrally by automatic or manual journal entries, for
example, the elimination of the gain/loss on an internal transfer of assets, should be booked by a
manual journal entry. Deferred tax is never booked automatically.
Booking Deferred Tax

The accounts used to book deferred tax are as follows:
Balance sheet
Income statement

There is no dedicated Audit ID to book deferred tax. As a general principle, deferred tax should be recorded
using the same Audit ID as the one used to record the original carrying amount or automatic/manual journal
entry giving rise to the temporary difference.
In case the base for deferred tax was generated automatically (for example, the elimination of
the gain/loss on an internal transfer of assets; Audit ID: DIS10), use the corresponding Audit ID
available for manual journal entries (DIS11 in this specific case).
Sometimes this principle may not apply, especially when a deferred tax is booked at the central level,
based on a temporary difference that is not recognized in the individual accounts, such as the carryforward
of unused tax losses. In this case, you should use Audit ID ADJ91-Other adjustment - Central - Man.
Example
An invoice issued for the sum of 1 000 was omitted from F's company accounts. This expense is booked in
the consolidated accounts using audit ID ADJ91.
75
Deferred Taxation
This additional expense posted in F's accounts should lead to the booking of a deferred tax asset (a tax
rate of 40% is used in this example):
Audit ID
Account
Flow
Debit
ADJ91
F15
400
Y99
Credit
400
Accounting for Deferred Tax

Variation in Tax Rates
According to IFRS standards, the impact of the variation in rates affects income when the original operation
also affects income. It affects reserves when the original operation is registered directly in
shareholders' equity. When deferred tax is associated with fair value adjustments, the impact of the
variation in rates is registered in income.
Manual journal entries should be booked in order to register the impact of variation in rates on deferred tax
existing at opening.
Offsetting Deferred Tax Assets and Liabilities by Reporting Unit

Deferred tax assets and liabilities could be offset for a given tax entity if conditions set out in IAS 12 are
met.
A manual journal entry for offsetting the deferred tax asset and liability balances must be booked to record
the net balance as an asset or liability.
76
Consolidation Entries
Section objectives
This section presents the manual and automatic journal entries related to the following consolidation topics:
calculating non-controlling interests for shareholders' equity
booking the share of investments in companies consolidated using the equity method
eliminating consolidated shares
maintaining the historical conversion rate for shareholders' equity and consolidated shares
booking goodwill

Audit ID
Description
CONS01
Consolidation entry not splittable
CONS10
Elimination of subsidiaries' capital and share premium
Available for
manual journal
entry
X
CTA01
Currency translation adjustments - Equity - Man.
CTA10
Currency translation adjustments - Equity - Auto
GW01
Disclosure of goodwill (gross value & impair.) and bargain

purchase - Man.
GW10
Booking of goodwill and bargain purchase - Auto
GW11
Booking of goodwill and bargain purchase - Man.
GW20
Currency translation adjust. on goodwill - Auto
GW21
Currency translation adjust. on goodwill - Man.
INV10
Elimination of investments - Auto
INV11
Elimination of investments - Man.
INV20
Currency translation adjust. on investments - Auto
INV21
Currency translation adjust. on investments - Man.
INV31

(Local currency)
INV32

(Consolidation currency)
NCI11
Calculation of non controlling interests - Correction
NCI-ADJ90
Other adjustment - NCI calc.
NCI-CTA10
Currency translation adjustments - Equity - NCI calc.
NCI-DIS10
Elim. of internal gain/loss on disposal of assets - NCI calc.
NCI-DIV10
Elimination of internal dividends - NCI calc.
NCI-DIV20
Currency translation adjust. on dividends - NCI calc.
NCI-FVA00
Fair value for incoming entities (central) - NCI calc.
NCI-INV30
Adjustment on gain/loss on disposal of subs. - NCI calc.
NCI-PACK01
Package data - NCI calc.
77
Audit ID
Available for
manual journal
entry
Description
NCI-PACK10
Adjustment to Group accounting policies - NCI calc.
NCI-PKIFRS10
Adjustment to IFRS - NCI calc.
NCI-PKIFRS12
Adjustment to IFRS - NCI calc.
NCI-PKIFRS90
Package data - IFRS central correction - NCI calc.
NCI-PACK90
NCI-AJIFRS90
Package data - Central correction - NCI calc.

IFRS adjustments - NCI calc.
NCI-PRO10
Elimination of internal impairment on investments - NCI calc.
NCI-PRO20
Elimination of internal provisions - NCI calc.
Calculation of Non-controlling Interests

Principles
The consolidated subsidiaries' shareholders equity is distributed between Group and non-controlling
interests. This is done using one of the NCI-xxxx audit IDs, depending on the source Audit ID. The
correspondence between source and destination Audit ID can be displayed in Dimension Builder,
(reference table: AUDIT-ID; characteristic: SPLIT).
In order to retrieve the variation in net equity as required by IAS1, the accounts that store the consolidated
subsidiaries shareholders equity are distributed using the following Group and Non-controlling interests
accounts:
Group equity account
NCI equity account
E1110
Issued capital *
E2010
NCI - Reserves and retained earnings
E1210
Share premium *
E2010
E1510
Revaluation surplus, before tax
E2020
NCI - Revaluation surplus before tax
E1511
Income tax on revaluation surplus
E2021
NCI - Income tax on revaluation surplus
E1520
Actuarial gains and losses, before tax

(suspense account)
E2030
NCI - Actuarial gains and losses, before tax

(suspense acc)
E1521
Income tax on actuarial gains and

losses (suspense acc.)
E2031
NCI - Income tax on actuarial gains and

losses (suspense acc.)
E1540
Hedging reserve, before tax
E2040
NCI - Hedging reserve, before tax
E1541
Income tax on hedging reserve
E2041
NCI - Income tax on hedging reserve
E1550
Fair value reserve, before tax
E2050
NCI - Fair value reserve, before tax
E1551
Income tax on fair value reserve
E2051
NCI - Income tax on fair value reserve
E1560
Foreign currency translation reserve,

before tax
E2060
NCI - Foreign currency translation reserve,

before tax
E1561
Income tax on foreign currency

translation reserve
E2061
NCI - Income tax on foreign currency

translation reserve
E1570
Equity component of compound

financial instruments
E2080
NCI - compound financ. instruments
E1610
Retained earnings
E2010
* These accounts are also transferred to the retained earnings (E1610) for any entity except the groups Parent company.
78
The calculation of non-controlling interests depends on the consolidation rate and the financial interest of
the scope. Depending on the flow, the calculation may use the opening or closing rate:
Data
Flow
Shareholders' equity at opening

Payment of dividends
Effect of changes in accounting policies
Net income for the period
Variation of capital in number of shares and subscription
Impact of reclassification
Fair value
Effect of internal mergers
Impact of variations in conversion rates
F00
F06
F09
F10
F40
F50
F55
F70
F80
Rates
Opening
Closing
When the consolidation rate and/or financial interest varies between opening and closing, the effect of
this variation is automatically taken into account in specific flows (see Scope Changes on page 99).
If needed, manual journal entries can be booked to correct the automatic calculation of non-controlling
interests:
Audit ID
NCI11
Account
Flow
E1xxx Equity attributable to owners of parent
Fxx*
E2xxx - Non-controlling interests
Fxx*
Debit
Credit
*The flow should be selected depending on the operation. For instance,flow F10 should be used to correct the NCI share of
the Net Income.
Example
Scenario
Parent company M subscribed to 60% of company F's capital when the latter was created in N. F is fully
consolidated on 31/12/N.
Package for F
General trial balance on 31/12/N

F00
Opening
Accounts
F99
Closing
ASSETS
Cash on hand
120
LIABILITIES
Issued capital
100
Retained earnings*
20
* This corresponds to the net income for the year.
Schedule PA2500
ACCOUNTS
CODE
F00
F99
F06
F10
Issued capital
E1110
100
Retained earnings
E1610
20
20
120
20
Net equity
F20
F30
F40
F50
F55
Spec.
Control
100
100
79
Automatic journal entries (before eliminating shares)

E1110 Issued capital
PACK01
100
PACK01
NCI-PACK01
40
NCI-PACK01
CONS10
60
CONS10
A2610 Cash on hand

PACK01
20
8
60
E2010 - NCI - Reserves and retained earnings
120
NCI-PACK01
40
NCI-PACK01
Calculation of the non-controlling interests on capital (40% x 100 = 40)

Calculation of non-controlling interests in net income: 40% x 20 = 8
Reclassification of capital to retained earnings
Accounts
Audit ID
A2610 Cash on hand
F10
PACK01
Total ASSETS
F15
F40
F99
120
120
120
120
PACK01
100
100
NCI-PACK01
<40>
<40>
CONS10
<60>
<60>
Total
PACK01
20
20
NCI-PACK01
<8>
<8>
CONS10
Total
12
60
60
60
72
40
40
NCI-PACK01
NCI-PACK01
Total
40
48
20
100
120
Control (assets - liabilities = equity)
N/A
N/A
0K
E2010 - NCI - Reserves and retained

earnings
N/A
Elimination of Investments
Principles
Consolidated investments in subsidiaries are eliminated by the parent against account A181OC-Elimination
of investment in subsidiaries - Owner company using audit ID INV10.
Account A181OC is then balanced in the subsidiarys balance sheet on account A181HC, using the same
audit ID INV10. This elimination impacts the subsidiary's reserves (account: E1610-Retained earnings).
The calculation of the impact on non-controlling interests is based on the financial interest of the Group in
the parent.
80
Example
Overview
The Group's organization chart is as follows:

M
F
80%
SF
50%
50% of SF is held by F and the rest by a non-Group company. SF is consolidated using the proportionate
method.
The scope of the Group at 31/12/N is as follows:
Company
Opening
method
Opening
consolidation
rate
Opening fin.
int.
Closing
method
Closing
consolidation
rate
Closing
owner. int.
Closing fin.
int.
Variation
FC
100%
100%
FC
100%
100%
100%
FC
100%
80%
FC
100%
80%
80%
SF
PC
50%
40%
PC
50%
50%
40%
Package for M on 31/12/N

Trial balance
Accounts
F00
Opening
F99
Closing
80
80
80
80
ASSETS
LIABILITIES
Issued capital
Schedule PA2100 Investments in Subsidiaries

INVESTMENT IN
SUBSIDIARIES
CODE
Investments in subsidiaries,
A1810
JV and associates
To be broken down
Subsidiaries, JV & assoc.
F00
F99
F20
80
80
80
80
80
80
F30 F40 F50 F55 F09
F70
Control
Code
RU F
Total
Package for F on 31/12/N

Trial Balance
F00
Opening
F99
Closing
500
500
Issued capital
100
100
Bank - Non current borrowings
400
400
Accounts
ASSETS
LIABILITIES
81

INVESTMENT IN SUBSIDIARIES
CODE
Investments in subsidiaries, JV and

associates
A1810
F00
F20
500
500
500
500
500
500
To be broken down
F99
F30 F40 F50 F55 F09
F70
Control
Code
RU SF
SF
Total
Package for SF on 31/12/N

Trial Balance
Accounts
F00
Opening
F99
Closing
1 000
1 400
1 000
1 000
ASSETS
Cash on hand
LIABILITIES & EQUITY
Issued capital
Retained earnings
400
Schedule PA2500
ACCOUNTS
CODE
Issued capital
E1110
Retained earnings
E1610
Net equity
F00
F99
1 000
1 000
1 000
F05
F10
400
400
1 400
400
F20
F30
F40
F50
F55
Automatic journal entries

Company M
A1810 Investment in subs. JV and assoc.
PACK01
80

PACK01
INV10
80
80
A181OC Elimination of investment in subsidiaries Owner company

INV10
80
Company F
PACK01
INV10
82
500

PACK01
500
100
NCI-PACK01
20
CONS10
80
Spec.
Control

PACK01
400

INV10
A181HC Elimination of investment in subsidiaries Held company

INV10
80
500

CONS10
INV10
80
80

NCI-PACK01
20
Company SF
A2610 Cash on hand
PACK01
700
PACK01
NCI-PACK01
40
400
100
CONS10
400
200
400
INV10
500
CONS10
INV10
NCI-PACK01

PACK01
500

NCI-PACK01
INV10
140
100
Local data from SF is consolidated at 50%

Calculating NCI in SF's equity:
Capital: Group share = 40% x 1000 = 400, NCI = 500 400 = 100
Net income: Group share = 40% x 400 = 160, NCI = 200 160 = 40
Reclassification of capital for SF
Elimination of SF's shares held by F
Impact on Group reserves = <500> x 80% = <400>
Impact on NCI = <500> x 20% = <100>
Calculating NCI in Fs equity: Group share = 80% x 100 = 80, NCI = 20% x 100 = 20
Reclassification of capital for F
Elimination of F's shares held by M
83
Accounts
Audit ID
Reporting
unit
F00
PACK01
80
PACK01
500
500
INV10
<500>
<500>
INV10
<80>
<80>
Total
A181HC Elimination of investment in
subsidiaries - Held company
<500>
<500>
INV10
<80>
<80>
<580>
<580>
INV10
500
500
INV10
80
80
580
580
PACK01
SF
Total ASSETS
200
700
500
200
700
500
200
700
80
80
PACK01
100
100
PACK01
SF
500
500
NCI-PACK01
SF
<100>
<100>
SF
<400>
<400>
NCI-PACK01
<20>
<20>
<80>
<80>
80
80
CONS10
CONS10
Total
PACK01
SF
200
200
NCI-PACK01
SF
<40>
<40>
CONS10
SF
400
400
INV10
SF
<400>
<400>
CONS10
80
80
INV10
<80>
<80>
Total
160
SF
NCI-PACK01
SF
SF
<100>
<100>
20
20
INV10
Total
PACK01
Total
100
40
20
F
100
40
40
60
400
400
400
400
500
200
Control (assets liabilities)
OK
N/A
84
160
NCI-PACK01
NCI-PACK01
500
PACK01
80
SF
Total
F99
INV10
Total
A2610 Cash on hand
F15
Total
A181OC Elimination of investment in
subsidiaries - Owner company
F10
700
N/A
OK
Converting Consolidated Shareholders' Equity and

Investments in Subsidiaries
Principles
Consolidated shareholders' equity (except Hedging reserves and Fair value reserves) and shares
belonging to foreign subsidiaries are maintained at their historical conversion rate.
As regards shareholders' equity, the differences between the historical and closing rates are carried over to
a specific account for shareholders' equity, E1560-Foreign currency translation reserve, before tax, using
audit ID CTA10. The NCI share will then be transferred from account E1560 to account E2060-NCI Foreign currency translation reserve, before tax, using audit ID NCI-CTA10.
The currency translation adjustment of consolidated investments in subsidiaries is triggered with the
same approach as the elimination of shares, but the journal entry is posted on dedicated accounts in
the equity (E1560 and E2060) and uses the dedicated audit ID INV20-Currency translation adjust. on
investments Auto).
The automatic processing is based on the conversion difference flow (F80) calculated automatically for all
of the balance sheet accounts and, in particular, for shareholders' equity and investment accounts (see
Converting Data on page 40).

When using the application to perform a consolidation for the first time, any opening conversion reserves
that exist should be posted by manual journal entry.
Conversion differences for shareholders' equity

Audit ID
Account
Flow
CTA01
E1xxx Shareholders' equity local accounts
F00
E1560 Foreign currency translation reserve, before tax
F00
Debit
Credit
Conversion differences for consolidated investments in subsidiaries
Entry posted in the shareholders accounts

Audit ID
Account
Flow
Debit
Credit
Investments
Debit
Credit
INV21
F00
Subs.

F00
Subs.
A
B
When the historical value of shares is greater than the value converted using the opening rate
When the historical value of shares is lesser than the value converted using the opening rate
85
Entry posted in the subsidiarys accounts

Audit ID
Account
Flow
Debit
Credit
Investments
INV21

F00
Owner comp.
E1560 Foreign currency translation reserve,

before tax
F00
Owner comp.
E2060 NCI - Foreign currency translation

reserve, before tax
F00
Owner comp.
A
B
*
Debit
Credit
When the historical value of shares is greater than the value converted using the opening rate
When the historical value of shares is lesser than the value converted using the opening rate
If applicable, the impact on equity should be split between Groups share and NCI, based on the groups share in the
owner company
Example
Overview
Parent company M created company F in the United States in N-1.

F's capital amounts to 100 USD. The conversion rate applicable when the company was created was 1.10
USD for 1 EUR. In M's local accounts, the value of F's shares is therefore 91 EUR (= 100 USD / 1.10).
Consolidation is performed for the first time using the application on 31/12/N. The evolution of F's
shareholders' equity between its creation date and the opening of period N is presented below:
(in USD)
1/1/N-1
Net income N-1
31/12/N-1
Capital
Reserves
Net income
Total
100
100
0
200
200
100
200
300
The evolution of the dollar's conversion rate for the period is as follows:
1/1/N-1
Average N-1
31/12/N-1
Average N
31/12/N
0.90
0.90
0.80
1EUR =
The conversion rate table for period N is as follows (certain for uncertain):
Currency
Closing rate
Average rate
Opening rate
EUR
USD
0.80
0.90

Trial balance
F00
Opening
F99
Closing
91
91
A2160 Cash on hand
100
100
Accounts
ASSETS

86

CODE

associates
A1810
F00
F20
91
91
91
91
91
91
To be broken down
F99
F30 F40 F50 F55 F09
F70
Control
Code
RU SF
Total

Trial balance (USD)
F00
Opening
F99
Closing
300
400
100
100
200
300
Accounts
ASSETS
A2160 Cash on hand
Schedule PA2500
ACCOUNTS
CODE
F00
F99
F05
F10
F20
Issued capital
E1110
100
100
Retained earnings
E1610
200
300
100
300
400
100
Net equity
F30
F40
F50
F55
Spec.
Control

When the historical data is retrieved, cumulated conversion differences at opening should be restored by manual journal
entry.
Evaluation of conversion reserves at opening:
Analysis of shareholders' equity on 01/01/N
Capital
Amount
in USD
Historical rate
N Opening
rate
100
Difference
Definition
Rate
(EUR)
Rate at creation date
1.10
<9>
Average N-1 rate
0.90
22
1
Retained earnings
200
300
13
Journal entry to be posted:
Post the following journal entry in EUR for F:

Audit ID
Account
Flow
Debit
CTA01
F00
F00
E1560 Foreign currency translation reserve, before tax
F00
Credit
22
13
87
Automatic journal entries generated for F
Journal entries that eliminate investments in subsidiaries without any specificity are not presented here:
A2610 Cash on hand
PACK01
500
PACK01
CTA01
CTA10
CONS10
88
64
CTA01
CTA10
25
CONS10
91
E1560 Foreign currency translation reserve, before

tax

PACK01
125
375
CTA01
22
CTA10
91
13
25
F's local data converted at closing rate

Restoring cumulative translation differences at opening for capital and reserves (manual journal entry)
Elimination of the period's conversion variation for Issued capital: 100/0.80 100/0.90 = 25
Elimination of the period's conversion variation
Opening retained earnings: 200/0.80 200/1 = 50
Net income for the period: 100/0.80 100/0.90 = 14
Total = 64
NCI calculation (N/A because the group holds 100% of F) and transfer of Capital to Retained earnings
Accounts
Audit ID
Reporting
unit
F00
PACK01
91
91
INV10
<91>
<91>
<91>
<91>
<91>
<91>
91
91
91
91
9
Total
INV10
Total
INV10
Total
A2610 Cash on hand
F99
PACK01
300
111
89
500
309
111
89
509
309
111
89
509
PACK01
100
PACK01
100
CTA01
<9>
CTA10
CONS10
Total
100
25
CTA01
CTA10
125
<9>
<25>
<91>
<25>
<91>
100
Total
F80
Total ASSETS
E1560 Foreign currency translation reserve,

before tax
F15
PACK01
Total
F10
<13>
100
<13>
<13>
89
89
76
64
375
PACK01
200
INV10
<91>
<91>
CTA01
22
22
CTA10
CONS10
Total
111
89
<64>
91
<64>
91
222
111
333
309
111
89
509
OK
N/A
OK
OK
N/A
Analysing the changes in the foreign currency exchange reserve for

the Group
A report provides an analysis of the impact of changes in conversion rates on the net equity kept at
historical value.
Folder
Book
Schedule
C4
C46
C46-30 Year-to-date - Analysis of changes in Foreign currency exchange

reserve
89
Optional Conversion Process on Investment and Capital/Share

Premium
By default, for any B/S account, flows F20-Increase/Purchase and F40-Subscription to capital
increase/decrease are converted using the average rate of the period.
It is possible to perform a more accurate conversion based on the exact daily rate on the following
account/flow combinations:
A1810-Investments in subsidiaries, JV and associates / F20,
A1810-Investments in subsidiaries, JV and associates / F40,
E1110-Issued capital / F40,
E1210-Share premium / F40.
This can be used to handle more easily some consolidation events such as an incoming company in the
scope or the subscription to a capital increase. Indeed, the conversion of the amounts entered on these
account/flow combinations is done using the specific exchange rate at the date of the event, and you do not
need to post manual journal entries to refine conversion.
This optional conversion process is based on:
An additional detail by date provided in the package for these account/flow combinations.
Daily rates entered in the conversion rate table.
Data Entry Schedules

To enter detail by dates on Investment and Capital/Share premium, use the following schedules, depending
on which account/flow combination you want to detail:
Account/Flow
combination
Data entry schedule
Link from schedule
A1810 / F20
PA2350 Purchase/disposal of investment in

subsidiaries / Date
PA2300 Purchase/Disposal of
investment in subsidiaries
A1810 / F40
PA2360 Subscriptions to subsidiaries capital

increase / Date
PA2100 Investments in subsidiaries
PA2550 Variations of issued capital and share

premium / Date
PA2500 Equity statement
E1110 / F40
E1210 / F40
Note: these schedules must be filled out only by entities using a reporting currency that differs from the
consolidation currency.
Retrievals
The following reports have been configured to check:
the consistency of the analysis by date entered in the packages and the daily rates entered in the
exchange rate table
the conversion at daily rate by identifying missing analysis by date and/or missing daily exchange
rates
Folder
Book
Schedule
C4
C43
C43-05 Check consistency between Analysis by date - Daily exchange rate

C43-15 Checking the conversion of capital increase/decrease
C43-20 Checking the conversion of subscription to capital increase
C43-25 Checking the conversion of purchase of investments
90
Example: Subscription to a capital increase

Overview
Parent company M holds US subsidiary F1 at 100% since it was created. Reporting currency for M and
consolidation currency are EUR.
On 12/07/N, M subscribes to 100% of an increase in capital made by F1. At this date, the conversion rate
for the USD is 1 EUR=1.17 USD. The increase in capital amounts is 100 USD.
Suscription by M = 100 USD / 1.17 = 85 EUR.
Extract from the conversion rate table for 30/09/N (certain for uncertain 1EUR = x CUR)
Currency
OR
Opening rate
AR
Average rate,
current period
07.12
Rate for
July 12
CR
Closing rate
EUR
USD
1.02
1.11
1.20
1.17

CODE

associates
A1810
F00
F20
F30 F40 F50 F55 F09
140
225
140
225
85
140
225
85
To be broken down
F99
F70
Control
85
Code
RU F
Total

Schedule PA2500
ACCOUNTS
CODE
F00
F99
F05
F10
Issued capital
E1110
200
300
Retained earnings
E1610
150
200
50
350
500
50
Net equity
F20
F30
F40
F50
F55
Spec.
Control
100
100
Schedule PA2550 Variations of issued capital and share premium / Date

CODE
Issued capital
E1110
To be broken down
F40
100
0
Transaction dates
07.12 July 12
100
Total
100
th
Based on the additional data provided in schedule PA2550 and the exchange rate for July 12 entered in
the exchange rate table, the flow F40 on Investment and Issued capital will be converted at the exact
exchange rate, that is 1.17.
If the subscription to the capital increase is made by a subsidiary reporting in a foreign
currency, schedule PA2360 is used to detail this subscription by date. Refer to the Data entry
guide for further information.
91
Equity Method
Principles
Equity method journal entries consist of booking the share of net assets in the account Investments
accounted for using equity method. This value is based on the subsidiary's shareholders' equity after taking
into account adjustments, eliminations and the consolidation rate of the scope.
These journal entries are booked using the original audit IDs, for example package or adjustment.
Example
Overview

M
F
80%
20%
S
F
The scope of the Group at 31/12/N is as follows:

Company
Opening
method
Opening
consolidation
rate
Opening
fin. int.
Closing
method
Closing
consolidation
rate
Closing
owner.
int.
Closing fin.
int.
Variation
FC
100%
100%
FC
100%
100%
100%
FC
100%
80%
FC
100%
80%
80%
SF
EM
20%
16%
EM
20%
20%
16%
F00
Opening
F99
Closing
160
160
160
160

Trial balance
Accounts
ASSETS
LIABILITIES

INVSESTMENT IN SUBSIDIARIES
CODE

associates
A1810
To be broken down
RU F
Total
92
F00
F99
F20
160
160
160
160
160
160
Code
F
F30 F40 F50 F55 F09
F70
Control

Trial balance
Accounts
F00
Opening
F99
Closing
200
200
200
200
ASSETS
LIABILITIES

CODE

associates
A1810
F00
F20
200
200
200
200
200
200
To be broken down
F99
F30 F40 F50 F55 F09
F70
Control
Code
RU SF
SF
Total
Package for SF on 31/12/N

Schedule PA2500
ACCOUNTS
CODE
Issued capital
E1110
Retained earnings
E1610
Net equity
F00
F99
F05
F10
1 000
1 000
400
400
1 000
1 400
400
F20
F30
F40
F50
F55
Spec.
Control
Automatic journal entries

Company M
PACK01
160

PACK01
INV10
160
160

INV10
160
Company F
PACK01
INV10
200

PACK01
200
NCI-PACK01
CONS10
200
40
160
93

INV10
200
INV10

INV10
160
160
NCI-PACK01
160
CONS10
40
Company SF
A1500 Investments accounted for using equity
method
280

PACK01
NCI-PACK01
CONS10
INV10
NCI-PACK01
160
16
CONS10
40
160
80
160
INV10

INV10
40
NCI-PACK01
56
Booking of investments in associates:
94

PACK01
200
At opening: Equity method value = 1000 x 20% = 200

Net income for the period = 400 x 20% = 80
Elimination of SF's shares held by F
Impact on NCI = <200> x 20% = <40>
Calculating NCI in SF's equity:
Capital: Group share = 16% x 1000 = 160, NCI = 200 160 = 40
Net income: Group share = 16% x 400 = 64, NCI = 80 64 = 16
Reclassification of capital for SF
Elimination of F's shares held by M
Calculating NCI in Fs equity: Group share = 80% x 200 = 160, NCI = 20% x 200 = 40
Reclassification of capital for F
200
Accounts
A1500 Investments accounted for using equity
method
Audit ID
Reporting
unit
F00
F10
F99
PACK01
SF
200
80
280
200
80
280
Total
PACK01
160
160
PACK01
200
200
INV10
<200>
<200>
INV10
<160>
<160>
Total
INV10
SF
<200>
<200>
INV10
<160>
<160>
<360>
<360>
Total
INV10
200
200
INV10
160
160
360
360
Total
Total ASSETS
200
PACK01
280
160
160
PACK01
200
200
PACK01
SF
200
200
NCI-PACK01
SF
<40>
<40>
SF
<160>
<160>
NCI-PACK01
<40>
<40>
<160>
<160>
160
160
CONS10
CONS10
Total
PACK01
SF
INV10
SF
80
<160>
80
<160>
NCI-PACK01
SF
CONS10
SF
160
160
INV10
<160>
<160>
CONS10
160
160
Total
80
INV10
<16>
64
<16>
64
SF
<40>
<40>
NCI-PACK01
SF
40
40
NCI-PACK01
SF
NCI-PACK01
Total
16
40
16
40
40
16
56
200
80
280
OK
N/A
OK
95
Booking of Goodwill
Full and Proportionate Consolidation Methods
Booking Gross Goodwill
Goodwill is booked automatically in the consolidated balance sheet based on declarations made by manual
journal entry using audit ID GW01 on technical account XA1310-Declared goodwill analyzed by owner,
Gross. This has an effect on balance sheet account A1310-Goodwill.
The manual journal entry is booked for the subsidiary, with a breakdown per share used to identify the
owner company. It must be entered in the subsidiarys reporting currency.
The automatic journal entry is posted for the subsidiary using audit ID GW10-Booking of goodwill and
bargain purchase - Auto. The impact on the consolidated equity is split between Group and Non-controlling
interests, based on the groups financial interest in the owner company.
The account for declaring the goodwill uses the same sign convention as its corresponding account in the
balance sheet. When you enter a debit amount for account XA1310, this will generate an increase in
goodwill for account A1310. When you enter a credit amount, this will generate a decrease in goodwill for
the same account.
Example of journal entry:
Audit ID
GW01
Account
Flow
XA1310-Declared goodwill analyzed

by owner, Gross
Debit
B
Credit
X
Share
Debit
Credit
Code of the subsidiarys owner. The journal entry for declaring goodwill is posted in the subsidiarys
accounts.
The flow to be used in the journal entry depends on the event from which goodwill originates. For example,
use flow F01 for an incoming entity.
Booking Goodwill Impairment

The principles are identical to those presented above for booking goodwill.
The account for declaring goodwill impairment is XA1312-Declared goodwill analyzed by owner, Impair.
The corresponding account in the balance sheet is A1312-Goodwill, Impair. and in the income statement
P1630-Impairment of goodwill.
The flow to be used for booking impairment is flow F25.
Example of journal entry:
Audit ID
GW01
A
Account
Flow
XA1312 Declared goodwill analyzed by

owner, Impair.
F25
Debit
Credit
Share
Debit
Credit
X
Code of the subsidiarys owner. The journal entry for declaring goodwill impairment is posted in the
subsidiarys accounts.
Bargain Purchase
When a business combination causes a bargain purchase, the corresponding gain is recorded by a manual
journal entry on technical account XA1300-Declared bargain purchase analyzed by owner. An automated
journal entry will impact the income statement (P1640-Gain on bargain purchase) against the consolidated
equity.
To make sure that flow F01-Incoming units remains balanced, a clearing account (A13CL-Clearing account
- Bargain purchase) is used on both flows F01 and F25.
The other principles are the same as for booking a goodwill: the same Audit ID (GW01), impact on the
consolidated equity, and breakdown by owner using the Share dimension.
96
Full Goodwill Method

It is possible to account for a business combination by applying the full goodwill method. The manual
journal entry is posted with a share detail on TP-999-Third parties.
The automated journal entry then impacts account A1310-Goodwill against Non-controlling interests
(account E2010-Non-controlling interests - Reserves and retained earnings).
Goodwill Conversion
For consolidated entities reporting in a foreign currency, any change in the conversion rate impacts the
goodwill (A1310), against the foreign currency translation reserves (E1560 for the Group, E2060 for Noncontrolling interests).
A report enables you to analyse the changes in the foreign currency translation reserve for the Group
resulting from a change in exchange rate impact the net goodwill.
Folder
Book
Schedule
C4
C43
C43-75 Year-to-date - Analysis of changes in Foreign currency exchange

reserve - net goodwill
Example
Scenario 1

M
F
90%
SF
80%
By acquiring SF on 01/01/N, goodwill amounting to 2 000 was generated. An impairment of 100 is entered
for the period. The group does not apply full goodwill method for this business combination.
Manual journal entries to be posted
Declaration of goodwill:
Reporting
unit
Audit ID
SF
GW01
Account
Flow
Debit
XA1310-Declared goodwill
analyzed by owner, Gross
F01
2 000
Credit
Share
Debit
2 000
Credit
Share
Debit
100
Credit
Declaration of goodwill impairment for the period:

Reporting
unit
Audit ID
SF
GW01
Account
Flow
XA1312 Declared goodwill

analyzed by owner, Impair.
F25
Debit
Credit
100
Accounting entries generated
These journal entries are generated for SF.

Balance sheet:
A1310 Goodwill
GW10
2 000
GW10
GW10
E2010 NCI - Reserves and retained earnings

GW10
GW10
200
10
1 800
90
A1312 Goodwill, Impair.

GW10
100
97
Income statement:
P1630 Impairment of goodwill
GW10
100
Booking of goodwill: The impact on reserves is allocated between Group and NCI based on the
parent's financial interest, i.e. Group share = 90% x 2000 = 1800, NCI = 200.
Booking of goodwill impairment. The impact on net income is allocated between Group (90%x100 =
90) and NCI (10%x100 = 10).
Scenario 2 Applying full goodwill method
Using the previous example, suppose the Group applies the full goodwill method. Based on the estimated
fair value of the Non-controlling interests, the Goodwill attributable to NCI is 250.
The journal entry to declare this goodwill should be posted as follows:
Reporting
unit
Audit ID
SF
GW01
Account
Flow
Debit
F01
F01
Credit
Share
Debit
2 000
2 000
250
TP-999
250
Credit
Goodwill for EM Entities

When a goodwill or a bargain purchase is booked for an entity accounted for using Equity method, the
principles described above for Full or Proportionate consolidation subsidiaries apply. The only exceptions
are as follows:
98
To comply with IAS28 standard, the gross goodwill and, if applicable, the corresponding impairment,
is booked in the balance sheet using account A1500-Investments accounted for using equity
method. In other words, the goodwill is not distinguished from the Groups share of the subsidiarys
net assets.
In the income statement, the impairment of goodwill impacts account P3000-Share of profit (loss) of
assoc. & JV accounted for using EM. The same account is used in case a business combination
generates bargain purchase.
Scope Changes
Scope Changes
Section Objectives
This section gives an overview of the scope changes and deals in deeper details with the following cases:
An entity enters the consolidation scope.
An entity exits the consolidation scope.
Key Points
For incoming units:
Specific exchange rates must be entered for an incoming unit.
Package data on flow F00 must correspond to the position at the date the subsidiary enters the
scope.
Fair value adjustment is booked manually using audit ID FVA11.
Goodwill or bargain purchase is booked by an automatic journal entry based on a manual

declaration on technical accounts.
For outgoing units:
Specific exchange rates must be entered for an outgoing unit.
Entities can exit the consolidation scope at the opening or during the fiscal year; in this case, they fill
out a package in which F99 corresponds to the position at the date of the exit.
A manual journal entry must be posted on audit ID INV31 with the local currency or INV32 with the
consolidation currency to book the difference between the net gain/loss on disposal in the individual
accounts of the owner company and the net gain/loss in the consolidated accounts.
Overview of the Scope Changes

Typology of Scope Changes
Business combinations, defined in IFRS3 and IAS27 standards, and scope changes as they are defined in
SAP BusinessObjects Financial Consolidation can be summarized as follows:
Consolidation
method *
Status in FC (consolidation engine) *
Events
Opening Closing
Incoming Outgoing
entity
entity
Change in method
FC/PC->E
E->FC/PC
Comments
Change in
cons. %
ACQUISITION
Acquisition of a significant
influence
NC
Acquisition of a joint-control
NC
PC
Acquisition of a controlling
interest
NC
FC
99
Scope Changes
Consolidation
method *
Status in FC (consolidation engine) *
Events
Opening Closing
Step acquisition (business

combinations achieved in
stages)
Incoming Outgoing
entity
entity
FC
PC
FC
PC
NC
FC
PC
FC
NC
FC
NC
FC
FC
PC
PC
PC
PC
Change in method
FC/PC->E
E->FC/PC
Comments
Change in
cons. %
X
X
LOSS OF CONTROL
With or without retaining a

residual interest
X
X
X
EQUITY TRANSACTIONS
Transactions with NCI that do
not change control
Variation of interest %
in the conso scope
OTHER OPERATIONS
Joint control achieved in stage
Partial disposal of a JV
Increase in parents ownership

interest
X
X
Variation of interest %
in the conso scope
* NC: Not consolidated

FC: Full consolidation
PC: Proportionate consolidation
E: Equity method
Scope Changes: Using the Right Flow

In the IFRS Starter Kit, three flows are dedicated to record investments and disposals of shares in
consolidated entities:
F20: Increase/Purchase
F30: Decrease/Disposal
F40: Subscription to capital increase/decrease
100
Scope Changes
The following table indicates which flow is used in the held entitys equity to deal with the scope change,
depending on the flow used in the package and the status of the held entity:
Flow used in
the package
Status of held entity in scope
Flow used in held entitys equity
Incoming
F01 (incoming entities)
Change in consolidation method
F03 (new method)
Others (held entity fully consolidated)
F92 (increase/decrease in interest rate)
Others (held entity PC or EM)
F04 (change in consolidation rate)
Outgoing
F98 (Outgoing entities)
Change in consolidation method
F03 (new method)
Others (held entity fully consolidated)
F92 (increase/decrease in interest rate)
Others (held entity PC or EM)
F04 (change in consolidation rate)
All
F40 (capital increase)
F20
F30
F40
Events Covered in this Documentation

This documentation will cover in detail the two following consolidation events:
incoming entities
outgoing entities
Indeed, these events happen quite frequently in a consolidation; additionally, some of the information
presented here (concepts, journal entries, and so on) will be applicable when dealing with other types of
scope changes: booking goodwill or bargain purchase, correcting the net gain on disposal of investments.
It may also be pointed out that, according to IFRS3, a business combination achieved in stages (E->FC or
PC->FC) should be dealt with as if the existing entity had been disposed of, and a new entity (consolidated
using Full consolidation) had been acquired.
Any manual journal entries posted on a company changing in consolidation methods should be
entered with a journal entry restriction (Variant, Scope or Currency) to be accurately taken into
account during the consolidation process.
Incoming Entities
Preparing the Reporting Cycle
Updating Exchange Rates
The principles for updating the exchange rate table for entities with a foreign reporting currency are
described in chapter Entering Conversion Rates on page 21.
When such an entity enters the scope at a date that is not the beginning of the fiscal year, however,
specific exchange rates should be entered for this reporting unit, using the RU-specific rates functionality.
The table below shows how to populate the exchange rate table, with the assumption that consolidations
are run each quarter, and that the entity enters the scope during Q3.
The two options for data conversion are:
YTD
quarterly
101
Scope Changes
Rate version
Rate type
A-YTD (Year-to-date) for Q3*
A-PER (Periodic) for Q3*

period
[Not used]
[Not used] **

period
Rate at the acquisition date

period
Average rate between

th
acquisition date and Sept 30
Average rate between acquisition

th
date and Sept 30
CR - Closing exch. rate, current

period
Rate at Sept 30
th
Rate at Sept 30
th
* No RU-specific exchange rates are needed for Q1 and Q2.

** The ARPP rate type is not used because it applies to quarter Q2 during which the entity was not consolidated.
If you opt for a periodic conversion, populating the exchange rate for the subsequent period (Q4 in our
example) must be done as follows:
Rate version
Rate type
A-PER (Periodic) for Q4
period
Average rate between acquisition

th
date and Sept 30

period

period
Average rate between Oct 1 and

st
Dec 31

period
Rate at Dec 31
st
st
You will only enter the daily rate types of the quarter in the periodic conversion..
Consolidation Package
The package for an incoming entity should be entered following the principles described in chapter
Collecting Data on page 23.
The opening balances for the balance sheet, however, will not be pre-loaded, and flow F00 must be
populated based on the position at the date the entity enters the scope, and the movements will correspond
to the variation between that date and the closing date only.
As for the income statement, the amounts to enter correspond to the income and expenses over the same
period.
Consolidation Scope
In the consolidation scope, any entity not consolidated at the opening and consolidated at closing,
regardless of the consolidation method applied, is identified as an incoming entity.
Consolidation Engine
The opening balances of an incoming entity are automatically transferred from flow F00-Opening position to
flow F01-Incoming units by the consolidation engine.
102
Scope Changes
Intercompany Eliminations
The incoming entity must declare any intercompany transaction, for example payable/receivable,
loan/financial debt, provision, and income/expense, towards the relevant Groups entities.
As for the entities that are consolidated at opening, they should make sure that they disclose correctly
intercompany data towards the incoming entity. Two situations may occur:
The incoming entity was already codified in the list of reporting units at the end of the previous fiscal
year, and the counterparts have declared their intercompany transactions with the incoming entity.
In this case, intercompany data is automatically eliminated on flow F01-Incoming units.
Otherwise, intercompany transactions with the incoming entity are included in the amount declared
towards Third-parties (TP-999). In the package, the corresponding amounts should be reclassified
on the relevant entity using flow F50.
In this case, intercompany data will be automatically eliminated on flow F50. If you want to refine the
analysis by flows on intercompany eliminations, transfer the intercompany declarations from flow
F50 to flow F01-Incoming units by a manual journal entry.
Dividends
When dividends are paid by an entity that enters the consolidation scope, one of the following scenarios
occurs:
If the dividends are paid to the former shareholders, flow F06 on equity is automatically transferred
to flow F01, so that the equity on flow F01 is net of dividends. Goodwill is calculated based on this
amount, and flow F01 on Groups equity equals zero.
If the dividends are paid to the new shareholders, consolidated entities, they are first eliminated on
flow F06. Then, two additional automatic journal entries are triggered:
In the payers accounts, flow F06 on equity is transferred to flow F01.
In the beneficiarys accounts, the impact of dividends elimination is transferred from flow F06 to
flow F01.
In both scenarios, after automatic journal entries have been triggered, flow F06 equals zero.
Manual Processing
Fair Value Adjustment
According to IFRS, the assets and liabilities of an incoming entity must be evaluated at their fair value at
the acquisition date.
In the starter kit, any difference between the value of an asset/liability in the package and its fair value must
be posted by a manual journal entry using audit ID FVA11-Fair value for incoming entities (central) - Man.
If needed, a deferred tax on the fair value adjustment must be posted, using the same audit ID.
Examples of fair value adjustment journal entries are presented in chapter Making Adjustments to
Packages on page 51.
Booking Goodwill
The principles for booking goodwill are explained in chapter Booking of Goodwill on page 96.
103
Scope Changes
Outgoing Entities
Preparing the Reporting Cycle
An entity may exit the consolidation scope when:
the Group has transferred control or significant influence on this entity to external shareholders,
this entity is merged into another consolidated entity.
Consolidation Package
Normally, any entity exiting the consolidation scope at a date that is different from the first day of the fiscal
year should fill out a consolidation package, detailing all the income/expenses and balance sheet
movements that occurred from the beginning of the fiscal year until control was transferred, or the entity
was merged.
However, getting the corresponding information is not always easy. Provided that this has not a significant
impact, the Group has several options:
Take the package used for the last interim consolidation, considering that the figures are very similar
to the actual figures at the date of the exit.
Fill out a package with the exact figures at the date of the exit.
Process the exit as if it happened at the beginning of the fiscal year.
If you fill out a package, the entity is considered as exiting the scope during the fiscal year.
On the contrary, if the impact of the exit corresponds to the closing position of the previous fiscal year, the
entity will be considered as exiting the scope at opening. No package is required in this case.
Consolidation Scope
In the consolidation scope, any entity consolidated at opening and not consolidated at closing is considered
as exiting the scope.
Depending on which additional information you enter in the scope for this entity, this entity will have one of
the four following statuses:
Intermediate data entry period
Acquiring reporting unit
Status
Not specified
Not specified
Outgoing at opening
Not specified
Specified
Outgoing acquired at opening
Specified
Not specified
Outgoing during period
Specified
Specified
Outgoing acquired during period
Intermediate Data Entry Period

The data entered in this field is used by the consolidation engine to identify which package must be loaded
in the consolidation.
Examples
The entity is disposed of on 15/07/2009. When running the consolidation for 31/12, the Group
decides to take the financial position on 30/06 for this entity (which corresponds to the package filled
out for the 30/06 consolidation). Intermediate data entry period should be 2009.06.
The entity is disposed of on 31/10/2009, and has provided financial statements as of 31/10. These
financial statements are used to fill out the package used for 2009.12 consolidation. Intermediate
data entry period should be 2009.12.
104
Scope Changes
If no intermediate data entry period is entered, no data entry package will be loaded by the consolidation
engine and the entity will exit the scope based on the opening balances.
Acquiring Reporting Unit
This field must be filled out when an internal merger occurs during the fiscal year, to identify the acquiring
entity.
When an entity is merged into a non-group entity, it is considered a classical exit and the Acquiring
reporting unit field must not be entered. DO NOT enter TP-999 in the Acquiring reporting unit field.
Updating Exchange Rates

When a foreign entity exits the scope, specific exchange rates should be entered for this reporting unit,
using the RU-specific rates functionality.
The tables below show how to populate the exchange rate table, with the assumption that consolidations
are run each quarter.
The two options for data conversion are:
YTD
quarterly
Exit at Opening
Rate version
Rate type
A-YTD (Year-to-date) for Q1 to

Q4

period
[Not used]
[Not specified]

period
Rate at opening (default)
Rate at opening (default)

period
Rate at Jan 1

period
Rate at opening
st
Rate at Jan 1
st
Rate at opening
If you opt for a periodic conversion, populating the exchange rate for the subsequent periods (Q2, Q3 and
Q4 in our example) must be done as follows:
Rate version
Rate type
A-PER (Periodic) for Q2, Q3, Q4
period
period
Rate at Jan 1
st
st
Rate at Jan 1 (default)

period
Rate at Jan 1
st

period
Rate at Jan 1
st
105
Scope Changes
Exit during the Period

We assume the entity exits the scope in Q2. No RU-specific exchange rates are needed for Q1.
Rate version
Rate type
A-YTD (Year-to-date) for Q2*

period
[Not used]
Average rate Jan 1 to Mar 31

period

period
Average rate Jan 1 to exit date
Average rate Apr 1 to exit date

period
Rate at exit date
Rate at exit date
st
st
st
st
st

st
* The A-YTD exchange rate tables for Q3 and Q4 will be populated with the same values.
If you opt for a periodic conversion, populating the exchange rate for the subsequent periods, Q3 and Q4 in
our example, must be done as follows:
Rate version
Rate type
A-PER (Periodic) for Q3 and Q4
period

period

period

(same as Q2)

period
Rate at exit date
st
st
st
Consolidation Engine
When an entity exits the scope, the consolidation engine reverses all the balance sheet data (assets,
liabilities and equity) for this entity.
For an entity outgoing at opening, the reversal is triggered on flow F98 based on the opening
position (flow F00) for package data, manual journal entries without restrictions, and automatic
journal entries.
For an entity outgoing during the period, the reversal is triggered on the same flow F98, but based
on the opening position (flow F00) plus the movements of the period.
In case the entity is merged into another group entity, the same reversal is triggered but on dedicated flow
F70.
Journal entries with a restriction (Scope and/or Version and/or Consolidation currency) must be
reversed manually if required.
The eliminations of reciprocal transactions are reversed when an entity or its counterpart exits the
consolidation scope.
106
Scope Changes
As for the eliminations of internal provisions that were booked towards an entity that exits the scope, they
are also reversed automatically.
Manual Processing
The elimination of the gain/loss on internal transfer of assets must be reversed by a manual journal entry
when an entity or its counterpart exits the consolidation scope.
Correcting the Net Gain/Loss on Disposal

When an entity exits the scope, the net gain/loss booked in the individual accounts of its owner company
does not correspond to the net gain/loss that must appear in the consolidated financial statements.
The correction must be booked manually on Audit ID INV31- Adjust. on gain/loss on disposal of a subs., JV
or associate (Local currency) or INV32- Adjust. on gain/loss on disposal of a subs., JV or associate
1
(Consolidation currency) .The journal entry is posted in the owner entitys accounts, as follows:
Audit ID
INV31
Account
Flow
Debit
Credit
Share
Debit
Credit
F98
Held entity
P1615 Gains or losses on sale of shares
Y99
When the consolidated gain/loss is lower than in the individual accounts (that is, consolidated reserves are positive)
In the case where the consolidated gain/loss is higher than in the individual accounts.
INV32 should be used if the holding company of an outgoing company is in foreign currency. In that case the correction of the
gain/loss should be booked with the consolidation currency to avoid conversion calculation.
107
Completing the Consolidation

Section Objectives
This section describes the tasks required to complete the consolidated accounts.
Key Points
You should check the statement of changes in equity (including the statement of comprehensive income)
and the consolidated cash flow statement.
Checking consolidated shareholders' equity involves:
Eliminating subsidiaries' shareholders' equity, like capital or premium package data, should only
correspond to consolidated data for the parent company
Justifying the variations in the Group's share of net equity
The Statement of cash flows is generated automatically using flow analyses of movements in balance
sheet items. Discrepancies that appear between analyzed cash movements and actual change in cash in
the balance sheet should be corrected. These corrections are booked:
In balance sheet accounts for which the flow analysis has not been performed correctly or
completely
Directly in the line items of the cash flow statement if required
Checking the Statement of Comprehensive Income

Overview of the Statement of Comprehensive Income Reports
The starter kit for IFRS proposes two approaches to present the comprehensive income.
A unique report: a statement of comprehensive income including profit and loss and other
components of comprehensive income (SCI)
Two reports: an income statement (IS) and a statement of other comprehensive income (SOCI)
The following reports are available:

Folder
Book
Schedule
C1
C11
C11-20 Statement of Comprehensive Income
C1
C11
C11-10 Income Statement
C1
C11
C11-15 Statement of Other Comprehensive Income
Depending on the approach chosen, customers can archived either the statement of
comprehensive income or the income statement and the statement of other comprehensive
income
The detail by Reporting Unit can be displayed with the following reports:
Folder
Book
Schedule
C2
C21
C21-10 Income Statement by Reporting unit
C2
C21
C21-15 Statement of Other Comprehensive Income by reporting unit
108
Additional analysis reports of the Income Statement and of the Statement of Other Comprehensive Income
are available. You can access these reports by linking to them from one of the summarized reports above.
Folder
Book
Schedule
C2
C22
C22-10 Analysis of line item by account (Income Statement)
C2
C22
C22-25 Analysis of line item by reporting unit (Income Statement)
C2
C22
C22-30 Analysis of line item by reporting unit (Statement of Other

Comprehensive Income)
C2
C23
C23-05 Statement of Other Comprehensive Income breakdown
Schedule C23-05, in particular, provides details on the different account/flow pairs for each line item of the
SOCI.
Calculation matrix
Statement of Comprehensive Income
Profit (loss) for the period
Equity accounts
E1610
Retained earnings
E2010
Gains (losses) on exchange differences on E1540

E1541
translation, before tax
Income tax relating to gains (losses) on

exchange differences
Reclassification adjustments on exchange
differences on translation, before tax
Income tax relating to reclassification
adjustments on exchange differences
Gains (losses) on remeasuring AFS
financial assets, before tax
AFS
Reclassification adjustments on AFS
financial assets, before tax
adjustments on AFS
Gains (losses) on cash flow hedges, before
tax
cash flow hedges
Reclassification adjustments on cash flow
hedges, before tax
adjustments on cash flow hedges
Adjustments for amounts transferred to
initial carrying amount of hedged items
Income tax relating to transfer to initial
carrying amount of hedged asset
Flows
{F10}

E1550
E1551
E1560
Foreign currency translation reserve, before tax
E2040
E2041
E2050
E2051
E2060
NCI - Foreign currency translation reserve, before tax
E1561
Income tax on foreign currency translation reserve
E2061
NCI - Income tax on foreign currency translation reserve
E1560
E2060
E1561
NCI - Foreign currency translation reserve, before tax

Income tax on foreign currency translation reserve
E2061
NCI - Income tax on foreign currency translation reserve
E1550
E2050
E1551
E2051
E1550
E2050
E1551
E2051
E1540
E2040
E1541
E2041
E1540
E2040
E1541
E2041
E1540
E2040
E1541
E2041
{F80}
{F80}
{F02/F98}
{F02/F98}
{F55}
{F55}
{F02/F30/F98}
{F02/F30/F98}
{F55}
{F55}
{F02/F30/F98}
{F02/F30/F98}
{F20}
{F20}
109
Statement of Comprehensive Income

Gains (losses) on revaluation, before tax
revaluation
Actuarial gains (losses) on defined benefit
plans
Income tax relating to actuarial gains
(losses)
Equity accounts
Flows
E1510
Revaluation surplus, before tax
E2020
NCI - Revaluation surplus before tax
E1511
Income tax on revaluation surplus
E2021
NCI - Income tax on revaluation surplus
E1520
Actuarial gains and losses, before tax
E2030
NCI - Actuarial gains and losses, before tax
E1521
Income tax on actuarial gains and losses
E2031
NCI - Income tax on actuarial gains and losses
{F55}
{F55}
{F55}
{F55}

Manual journal entries can be booked to reclassify line items in the SCI.
These journal entries are booked using a dedicated account, XSCI - SCI reclassifications and calculations,
flow Y99 and the ANALYSIS dimension to identify the SCI items. There is also one dedicated audit ID for
these journal entries: CFS01-Consolidated Financial Statements correction - Man.
Double-sided journal entries are posted in SCI line items in order to make adjustments to the
Statement of Comprehensive Income. By convention, you enter a credit amount to increase the
relevant item and a debit amount to decrease it.
For instance, a journal entry should be booked to populate the SCI line item TSCI270 Other comprehensive
income related to non-current assets and disposal groups classified as held for sale (not calculated
automatically). Other journal entries should remain the exception as it is always preferable to modify the
source account/flow combinations.
Example
The reclassification of Gains (losses) on remeasuring available-for-sale financial assets, before tax
(SCI2210) in Other comprehensive income related to non-current assets and disposal groups classified as
held for sale (TSCI270) should be posted as follows:
Audit ID
Account
Flow
Analysis (SCI
line item)
Debit
CFS01
XSCI SCI reclassifications and calculations
Y99
SCI2210
TSCI270
Credit
Path between the Statement of Comprehensive Income and the

Statement of Changes in Equity
Statement of comprehensive income
Profit for the year
Change in revaluation surplus
Other comprehensive income for the year
Total comprehensive income for the year
Attributable to:
- Owners of the parent
- Non Controlling interest
1000
200
200
1200
960 Amount at 100% = 200
240 Attributable to owners (80%) = 160
Statement of changes in equity

Issued
Capital
Balance at opening
Total comprehensive income
110
Revaluation Retained
Surplus
earnings
160
Equity
Non
attributable Controlling
to owners
interest
800
960
240
Checking the Statement of Changes in Equity

Checks Specific to Certain Accounts
The following Group shareholders' equity accounts should only correspond to data for the parent company:
CODE
DESCRIPTION
E1110
Issued capital
E1210
Share premium
E1310
Treasury shares
Checking Variation Flows

Reference Report
Check the variation of shareholders' equity by running the following report:
Folder
Book
Schedule
C1
C11
C11-30 Statement of Changes in Equity
This report displays data for the entire Group or for just one reporting unit.
Note: This report provides an aggregated presentation of the accounts and flows. Further details can be
obtained using the following report, which displays all the equity accounts and all the flows:
Folder
Book
Schedule
C4
C46
C46-05 Statement of changes in consolidated equity and NCI
For each account, if needed, you can link to the following report to display a detail by Audit ID and entity:
Folder
Book
Schedule
C3
C32
C32-15 General Ledger by Reporting Unit and Audit ID (Flows)
Types of Flow
The flows that analyze net equity movements can be organized into four main categories.
Current Movements
Current movements in shareholders' equity include net income for the period, distribution of dividends and
the effect of changes in conversion rates on the contribution from foreign subsidiaries.
Net income for the period is booked in flow F10. The checks to be performed are:
Data for flow F10 should only be stored in accounts E1610-Retained earnings and E2010-Noncontrolling interests - Reserves and retained earnings.
The sum of accounts E1610 and E2010 for flow F10 should always correspond to the net income of
the P&L, stored on account TP000.
Dividends paid during the period appear on the flow F06. The checks to be performed are:
Flow F06 for Group shareholders' equity must correspond exactly to the distribution of dividends
made by the parent company.
Flow F06 for the NCI equity accounts should correspond to the dividends paid by consolidated
subsidiaries to external shareholders.
111
The effect of changes in conversion rates are shown in F80-Currency Translation Adjustment. In the
consolidated accounts, data should be stored on flow F80 only for the accounts related to:
Hedging reserve (E1540, E1541, E2040, E2041),
Fair value reserve (E1550, E1551, E2050, E2051),
Foreign currency translation reserve (E1560, E1561, E2060, E2061).
Flow F80 should equal zero for any other equity account, due to the conversion process that maintains
these accounts at their historical conversion rates.
Ad Hoc Operations
Ad hoc operations include:
Changes in accounting policies (F09)
Subscription to capital increase/decrease (F40)
Increases or decreases in capital are:
Those by the parent company which affect the variation of Group shareholders' equity.
Those performed by the subsidiaries. The impact on Group shareholders' equity should be
eliminated:
When the operation is subscribed to by each shareholder according to the initial investment, the
Group share of capital increase corresponds to the investment made, where the increase
corresponds to share value. Therefore, flow F40 is balanced for Group shareholders' equity.
If it is not the case, flow F40 should be balanced by flow F92-Change in interest rate for Group
shareholders' equity.
Scope Changes
For information on scope changes, see Scope Changes on page 99.
Other Variations
Transfer flow F50 is used to book transfers from one account to another. This flow should be balanced for
both the sum of Group shareholders' equity and the sum of Non-controlling interests, excluding accounts
E1570-Equity component of compound financial instruments and E2080-NCI-coupound finance.
Instruments. Check that this is the case for every company.
The effect of the fair value adjustment of assets and liabilities is displayed in flow F55.
Flows F20 and F30 on net equity are used as follows:
Flow
Usage
F20
F30
Hedging reserves reclassification adjustments (recycling)

To remove any hedging reserve gains or losses that was previously recorded from
hedging reserves and to include it in the initial cost of the acquired asset or liability.
Hedging reserves reclassification adjustments (recycling)
Transfer of hedging reserves gains or losses previously recorded in equity to the P&L
in the same period that the hedged cash transaction affects the P&L.
Reclassification adjustment (recycling) of the fair value reserve cumulative gain or loss
when the assets are disposed of.
Except for specific cases to be analyzed and justified, flow F15 is not used for changes in net equity.
112
Performing Detailed Checks for Reporting Units

You should check that the balance sheet controls are valid. These controls ensure that shareholders' equity
is produced from valid accounts, flows and audit IDs.
You can analyze the contribution of one or several reporting units to shareholders' equity by running the
following report:
Folder
Book
Schedule
C4
C46
C46-05 Statement of changes in consolidated equity and noncontrolling interest
You can link from this schedule to a General ledger by Reporting Unit and Audit ID.
It is also possible to display a report detailed by equity accounts (Group and NCI) with a detailed
contribution of each reporting unit.
Folder
Book
Schedule
C4
C46
C46-10 Check Shareholder's Equity
A detailed analysis of net equity is also available for one Reporting Unit:
Folder
Book
Schedule
C4
C46
C46-25 Detailed analysis of Net Equity
This report enables the validation of net equity impacts at each step of the consolidation process
This report gives the detail in rows of the different consolidation entries impacting net equity: adjustment,
non controlling interest corrections, elimination of investments and goodwill.
For elimination of investments and goodwill, the document provides the detail by holding companies.
In columns, the document proposes the validation of the exchange rate and consolidation rate application
and of non controlling interests calculation.
Control columns are calculated by the difference between the amount calculated in the document (grey
column) and the amount calculated during the consolidation process and stored in the consolidated
database.
Amounts are automatically calculated in the document thanks to exchange, consolidation and interest rates
that are retrieved in the three first column of the document.
113
Calculation matrix
Issued capital Share premium
Changes in accounting policies E1110 - {F09}
E1210 - {F09}
Treasury
shares
E1310 - {F09}
Issue of convertible notes

Share-based payments
Purchase and disposal of
treasury shares
Transactions with NCI
Other movements
E1510 E1570 - E1610 - {F09}

{F09}
E1610 - {F10}
Profit (loss)
Other Comprehensive Income
Issue of shares
Dividends paid
Transfers
Retained
earnings
Other reserves
E1540 E1561 {F02/F80/F98}

E1540, E1541 {F20}
E1540 E1551 {F30}
E1510 E1551 {F55}
E1110 - {F40}
E1210 - {F40}
E1110 - {F06}
E1210 - {F06}
E1110 - {F50}
E1210 - {F50}
E1510 E1561 - E1610 - {F50}

{F50}
E1570 - {F50}
E1610 - {F20}
E1310 - {F20/F30}
E1510 E1570 {F92}
E1110 E1210 E1310 E1510 E1570 {F01/F02/F03/F04 {F01/F02/F03/F04 {F01/F02/F03/F04 {F01/F03/F04/F15
/F15/F70/F80/F92 /F15/F70/F80/F92 /F15/F70/F80/F92 /F70}
/F98}
/F98}
/F98}
E1510 E1521,
E1570 {F02/F80/F98}
E2010 E2080 {F09}

E2010 - {F10}
E2040 E2061 {F02/F80/F98}
E2040, E2041 {F20}
E2040 E2051 {F30}
E2020 E2051 {F55}
E1610 - {F06}
E1310 - {F50}
NCI
E2010 - {F06}
E2010 E2070 {F50}
E2080 - {F50}
E2010 - {F20}
E2070 - {F20/F30}
E2010 E2080 {F92}

E1610 E2010 E2080 {F01/F02/F03/F04 {F01/F03/F04/F15
/F15/F40/F70/F80 /F70}
/F98}
E2010 E2031,
E2070, E2080 {F02/F80/F98}
E2010 - {F40}
E1610 - {F92}
Checking the Statement of Cash Flows

Overview of the Statement of Cash Flows Reports
The IFRS Starter Kit presents the consolidated statement of cash flows (SCF) using the indirect method.
The following reports are available:

Folder
Book
Schedule
C1
C11
C11-25 Statement of Cash Flows
C2
C21
C21-20 Statement of Cash Flows by Reporting Unit
The latter explains how differences between analyzed and actual cash movements arise. See Analyzing
Differences.
Additional analysis reports of the cash flow statement are available. You can access these reports by
linking to them from one of the summarized reports.
Folder
Book
Schedule
C2
C22
C22-35 Analysis of line item by reporting unit (Statement of Cash

Flows)
C2
C23
C23-10 Statement of Cash Flows breakdown
Schedule C23-10, in particular, provides details on the different account/flow pairs for each line item of the
SCF.
114
Analyzing Differences
When the cash movement analyzed in the cash flow statement does not correspond to the cash movement
in the balance sheet (that is, Closing Opening), the difference is booked in a control row. This row
is analyzed in bottom section of report C21-20-Statement of Cash Flows by Reporting Unit.
You can discover the source of the difference between the actual and calculated cash movements by the
configuration settings defined.
All authorized account/flow pairs are carried over to items in the cash flow statement, regardless
of whether they are analyzed or control items.
For example, variation flow F15 on Issued capital is normally equal to zero for equity accounts.
Theoretically, it therefore has no effect on Group cash flow. However, it is included in a control item,
SCF9340, so that if it does not equal zero, the difference can immediately be identified.
The table below describes the reasons why the cash flow statement may not balance:
SCF Line item
Differences highlighted
Differences on scope changes flows

SCF9110
Unbalanced flow F01
[a]
SCF9120
Unbalanced flow F03
[a]
Other unbalanced flows

SCF9210
Unbalanced flow F09
[b]
SCF9220
Unbalanced flow F50
[b]
SCF9230
Unbalanced flow F80
[b]
Other differences to be analysed
[a]
SCF9310
Change in depreciation/amortization to be analysed
[c]
SCF9320
Change in impairment/ provision to be analysed
[c]
SCF9330
Change in investing to be analysed
[c]
SCF9340
Change in financing to be analysed
[c]
SCF9350
Change in associates to be analysed
[d]
SCF9360
Business units - Balancing account
[e]
Assets should be equal to liabilities for flow F01-Incoming units. If this is not the case, then this
error originates in package data (a manual journal entry that does not balance on flow F01 cannot
be posted).
You can identify the Audit ID for which there is an inconsistency by running the following report:
Folder
Book
Schedule
C4
C42
To find out from which company this error originates, run the following report:
Folder
Book
Schedule
C4
C42
Run package controls again for this company using the Package Manager module.
The same check procedure applies to flow F03-Change in consolidation method (new). On this
flow, however, the inconsistency could also originate from a manual journal entry not balanced on
this flow.
115
[b]
Assets should be equal to liabilities for flows F09, F50 and F80. If there are errors, run the following
report:
Folder
Book
Schedule
C4
C42
You can then check the relevant audit IDs.

For the relevant reporting unit, run the following report:
Folder
Book
Schedule
C4
C42
You can then identify the relevant reporting unit.
Then run the following ledger containing journal entries posted for this Audit ID/Reporting unit
combination.
Folder
Book
Schedule
C3
C33
You can then identify the journal entry that is causing this error.
[c]
Changes in non-current accounts as well as depreciation and provision accounts should be broken
down into the relevant flows, such as increase/purchase, decrease/disposal, increase in
depreciation, and decrease in depreciation.
If this is not done, then variation flow F15 will not equal zero for these accounts and the statement
of cash flows will not balance.
Run the following report:
Folder
Book
Schedule
C2
C21
C21-20 Statement of Cash Flows by Reporting Unit
In case of error, identify the entities for which cash flow items SCF9310, SCF9320, SCF9330 or
SCF9340 do not equal zero, and link to the following report (for the corresponding entities):
Folder
Book
Schedule
C2
C23
C23-10 Statement of Cash Flows breakdown
You can then identify the accounts for which F15 does not equal zero.
For these accounts, run the following report to identify the origin (package, journal entry) of the
amounts stored on flow F15:
[d]
Folder
Book
Schedule
C3
C32
C32-05 General Ledger by Audit ID, Partner, JE number (Flows)
Data on flow F15 for account A1500-Investments accounted for using equity method may originate
from:
a manual journal entry
an automatic journal entry when change in net equity for the relevant subsidiary is not
completely broken down, that is, F15 does not balance
Except in specific cases, F15 is not involved in analyzing investments in associates and should
therefore equal zero by being booked against the relevant movement flow.
In case of errors, run the following report for account A1500 to identify the relevant Reporting unit
and Audit ID:
116
Folder
Book
Schedule
C32
You should then link to the following report for this Reporting unit/Audit ID combination, for account
A1500:
Folder
Book
Schedule
C32
You can then identify the journal entry posted in F15.

If needed, you can also open the following schedule for the relevant entity, and focus on the equity
accounts for which F15 would not equal zero:
[e]
Folder
Book
Schedule
C31
C31-10 Balance Sheet by Flow and Audit ID
If an error originates from a misuse of the balancing account for Business units (L26BU), run the
following report for this account:
Folder
Book
Schedule
C32
You should then link to the following report for this Reporting unit/Audit ID combination:
Folder
Book
Schedule
C32
This enables you to identify the reasons why F15 does not equal zero.

Principles
Manual journal entries can be booked to reclassify line items in the SCF.
These journal entries are booked in a dedicated account, XCFS-CF reclassifications and calculations, using
flow Y99 and the ANALYSIS dimension to identify the cash flow items. There is also one dedicated audit ID
for these journal entries: CFS01-Consolidated Financial Statement correction - Man.
Double-sided journal entries are posted in SCF line items in order to make adjustments to the cash
flow statement. By convention, you enter a credit amount to increase the relevant item and a debit
amount to decrease it.
These journal entries should remain the exception as differences that crop up between analyzed and actual
cash movements should normally be corrected through balance sheet flows. In certain cases, however, the
Group may want to correct the cash flow statement directly.
Any journal entry to correct the SCF directly without modifying the source account/flow combinations should
be posted as follows:
Audit ID
Account
Flow
Analysis (SCF
line item
CFS01
XCFS CF reclassifications and calculations
Y99
SCFxxx
Debit
Credit
SCFxxx
Example
A small subsidiary has not entered the breakdown of changes in financial debts.
Extract from F's package schedule PA3450:
ACCOUNT
CODE
Cash on hand
A2610
F00
20
F99
50
F15
F50
F55
Spec.
30
117
Extract from F's package schedule PA3550:

ACCOUNT
CODE
F00
F99
F20
F30
F50
F55
Spec.
Control
Borrowings, Non current
L1510
100
150
50
Other financial liabilities, Non current
L1550
10
-10
Extract from Fs package Schedule PA2500:

ACCOUNTS
CODE
F00
Issued capital
E1110
10
10
Retained earnings
E1610
30
20
-10
40
30
-10
Net equity
F99
F06
F10
F20
F30
F40
F50
F55
Spec.
Control
F's contribution to the Statement of cash flows:

SCF1000
Profit (loss) attributable to owners of the parent
-10
TSCF300
Net cash flows from (used in) operating activities
-10
SCF5310
Proceeds from borrowings
SCF5320
Repayments of borrowings
TSCF500
Net cash flows from (used in) financing activities
TSCF700
Net increase (decrease) in cash and cash equivalents
SCF7100
Cash and cash equivalents at beginning of period
20
SCF7200
Cash and cash equivalents at end of period
50
SCF9340
40
TSCF900
Differences to be analysed
40
-10
The Group chooses to balance the Statement of cash flows by classifying the changes in financial debts as
Proceeds from borrowings (-20) and Repayments of borrowings (+60).
The manual journal entry to correct the SCF is as follows:
Audit ID
Account
Flow
Analysis (SCF
line item
CFS01
XCFS CF reclassifications and calculations
Y99
SCF5310
Debit
60
SCF5320
20
SCF9340
40
F's contribution to the Statement of cash flows after corrections are made:
SCF1000
Profit (loss) attributable to owners of the parent
-10
TSCF300
Net cash flows from (used in) operating activities
-10
SCF5310
Proceeds from borrowings
60
SCF5320
Repayments of borrowings
-20
TSCF500
Net cash flows from (used in) financing activities
40
TSCF700
Net increase (decrease) in cash and cash equivalents
30
SCF7100
Cash and cash equivalents at beginning of period
20
SCF7200
Cash and cash equivalents at end of period
50
SCF9340
TSCF900
Differences to be analysed
118
Credit
Checking IFRS adoption

The starter kit for IFRS provides a complete set of pre-configured reports to ensure a fast and correct
reconciliation between local Gaap and IFRS. These reports are grouped together into the folder C5 IFRS
Adoption. It includes:
Financial statements enabling local Gaap and IFRS consolidated data comparison
Balance reconciliation with an analysis by audit IDs of differences between local GAAP and IFRS
Analysis reports that allow a complete audit trail of the differences till the journal entry number.
All reports should be initialized with two different consolidation versions: the first should be the
Local gaap version and the second one the IFRS version.
An exception exists for the report C51-05 Statement of Financial Position that requires to
initialize the versions both times, first for the opening position and second for the closing position.
The correct variables initialization is illustrated below:
Local Gaap version
IFRS version
To know more about the IFRS adoption operating process, see IFRS Adoption in Consolidated
Statements on BusinessObjects / Financialconsolidation / 7.5 / Master Guides on http://help.sap.com/
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SAP BUSINESSOBJECTS FINANCIAL

CONSOLIDATION 10.0, STARTER KIT FOR IFRS

Initializing the Consolidation ............................................................................................ 16

Collecting Data ................................................................................................................... 23

Receiving Packages .................................................................................................... 24

Consolidation Scope ......................................................................................................... 26

Processing the Data: Key concepts ................................................................................. 34

Retrieving and Checking Data ............................................................................................. 43

Making adjustments to individual accounts ................................................................... 46

Intercompany Transactions .............................................................................................. 56

Deferred Taxation .............................................................................................................. 75

Consolidation Entries ........................................................................................................ 77

Elimination of Investments ................................................................................................... 80

Scope Changes .................................................................................................................. 99

Completing the Consolidation ........................................................................................ 108

Performing Detailed Checks for Reporting Units ....................................................... 113

Each section presents:

A detailed approach with references to other sections for more information.

Configuration Design Documentation: This document offers in-depth knowledge about

You should refer to this documentation to get detailed information about:

using the application for operations and customization purposes.

making changes to the setup of the Starter kit.

CURRENCY: The currency in which the data is stored.

FLOW (see Flow-Based Consolidation).

PARTNER: The reporting unit involved in an intercompany transaction.

MANAGEMENT UNIT: In-built dimension not used in the starter kit

SHARE: The held company in the investment portfolios.

COUNTRY: The breakdown of external sales by geographical area.

Note: These dimensions do not always contain values.

JOURNAL ENTRY NUMBER

ORIGINAL REPORTING UNIT

Note: Data for these dimensions is automatically loaded by the application.

List of Accounting Flows

Depreciation, impairment and provisions

F25 - Increase in depreciation

F35 - Decrease in depreciation

Movements in shareholders' equity usually originate from:

The distribution of dividends (posted in flow F06)

The income of the current fiscal year (recorded in F10)

The increase or decrease in capital (posted in F40)

Increases are posted in F20.

Decreases are posted in F30.

Investments in subsidiaries and capital subscription (increase, decrease or creation of capital)

Transfers between items

Flows Specific to Consolidated Accounts

Effect of foreign exchange rate variations: F80

Effect of variations in scope:

Entering Data in Flows

Assets - Liabilities = Income

Initializing the Consolidation

Initializing the Consolidation

Update the list of companies and data entry sites

Enter the conversion rate for the period

Updating Reporting Units

Initializing the Consolidation

Structure of the Reporting Unit Table

Initializing the Consolidation

2. Select File > New.

4. Select File > Save.

Create new members in the Division/Branch list.

Select the Branch sub-characteristic for each of the divisions.

To create a new Division or Branch

Create a reporting ID in the Reporting Organizer module of the Operation domain.