Chapter 8 Introduction Aspects A number of customers have been using a pilot version of EC-CS with restricted functions based on Release 3.0. EC-CS will be officially released with Release 4.0. FI-LC will continue to be available in parallel with functions that remain essentially unchanged with respect to Release 3.0. Depending on the application area, new customers will therefore have a choice with respect to Release 4.0 as described below. Current FI-LC users will also have additional options. Decision Between FI-LC and EC-CS for the ‘Newcomer’ EC-CS offers advantages that clearly recommend it for any applications beyond ‘statutory consolidation.’ Regarding price, however, FI-LC forms part of the FI component. Only additional users must be ‘acquired’ while EC-CS forms part of the EC price list component and may have to be purchased separately. Essentially, both components provide the consolidation functions required for statutory consolidation. Of course, EC-CS can offer fewer customer and practical experiences, although the experiences gained in the FI-LC projects were applied to the new EC-CS development. FI-LC to EC-CS Transition FI-LC customers who wish to expand their consolidation application to include the topics of internal group reporting or who are interested in the expanded EC-CS functions need to develop a transition strategy. The plan is to make the FI-LC functions fully reproducible in EC-CS with the release subsequent to Release 4.0 and to offer migration programs as standard. Since the two ‘systems’ work with completely separate data, they can also be used in parallel to provide different ‘views.’ Due to the use of cross-application tools such as drilldown reporting, planning processor, and so forth, it is not possible to provide downward compatibility of EC-CS with a Release 3.0 system. 8-1 8 Introduction Aspects Decision for the ‘Prospective Customer’ Consolidation software does not necessarily have to be transaction-integrated with the operational accounting applications. It can also work in periodic linkage. The question of deciding between systems of different suppliers arises for SAP customers as well. The essential arguments in favor of integration from the SAP point of view are discussed in Chapter 3. They are further supported by the descriptions of functions and capabilities provided in Chapter 6. EC-CS Function List Function Sub-function Dimensions Parallel applications Authorization check Cross-view objects FI integration CO-PCA integration CO-PA integration∗ Master data Uploading from PC-Files Synchronization with operational SAP organizational units Graphical maintenance of hierarchies User-definable required/optional fields Time/version dependent data Flexible contact management∗ User field expansion∗ ∗ 8-2 probably after release 4.0 Assessment 8 Introduction Aspects Function Sub-function Assessment Data regarding inclusion type in consolidated entity Chart of accounts Parallel charts of accounts Fixed additional account assignment transaction type, partner, transaction currency Expandable additional fields in totals record∗ Comments∗ ‘From’ line items Special data for consolidation of investments Special data for elimination of interunit profit and loss∗ Creating with application inheritance∗ Delivered standard charts of accounts Data reporting Financial calendar (sender) Deadline monitoring∗ Report data reconciliation between sender-recipient Distribution of the group chart of accounts∗ (ALE) Direct manual entry Uniform planning processor Layout painter ∗ probably after release 4.0 8-3 8 Introduction Aspects Function Sub-function Documentation through entry documents∗ Delivery of standard data entry layouts External system interface Flexible upload Conversion of field contents Item-group-related data collection method∗ User-friendly error handling∗ Decentralized PC entry Decentralized master data maintenance, additional Entry in MS-Access with data entry forms Entry in MS-Excel ‘From’ line items Comments∗ Parallel entry of standardized values PC file import Validation checks Currency translation Reporting in Access Reporting in Excel (against Access table) ∗ 8-4 probably after release 4.0 Assessment 8 Introduction Aspects Function Sub-function Assessment Data export file Data export RFC∗ Multiple languages Authorization checks May be used in parallel with∗ EC-EIS, EC-BP Monitoring Report status display Reporting method R/3 real-time Reporting method R/3 periodic extract Reporting method R/3 ALE Reporting method R/2 PC file Reporting method MS Access file Reporting method MS Access RFC Reporting method flexible uploading PC file Reporting method flexible uploading RFC (BAPI) ∗ Corrections directly from error log∗ Corrections of entry files in editor∗ Statistical information regarding reporting scope∗ Delete function Copy function ∗ probably after release 4.0 8-5 8 Introduction Aspects Function Sub-function Validation check Account balance Data entry form balance Validation rule groups for consolidation units Document line validation Full document validation Cross-dimension validation Item formulas with additional account assignments Item formulas with period comparison Validation result error/warning Data correction from error log Correction mail to decentralized accounting staff members∗ Validation points local, standardized, group values Postings Document types: manual/automatic Valuations: consolidation unit, pair of units, group Parallel currency: transaction currency, local currency, group currency Item group validation by document types Automatic document number assignment ∗ 8-6 probably after release 4.0 Assessment 8 Introduction Aspects Function Sub-function Assessment Zero balance check (optional) Automatic posting of adjustments to net income for the period/retained earnings Automatic posting of deferred taxes Automatic offset posting across units Automatic reversal of posting in following period Totals report with document type columns Sample documents∗ Reversal with document number reference Flexible mass reversal Automatic deletion with repeat consolidation Optional posting without saving document Flexible journal entry report Currency translation Exchange rate indicator/currency translation key per item group Currency translation key – standard exchange rates Currency translation key – period exchange rates ∗ probably after release 4.0 8-7 8 Introduction Aspects Function Sub-function Currency translation key – historic based on acquisition year∗ Currency translation key – historic with weighted exchange rate∗ Currency translation key – historic based on changes in investment and investee equity Currency translation key - based on transaction currency Currency translation key – transfer of translated values Additional user logic Use of central SAP exchange rate table Analysis of translation differences by item groups Rounding method after translation Translation differences in the asset history sheet Local currency translation in the event of currency reform Interunit eliminations Assigned item sets Differences, separate by currency and other One-sided partner report Difference recipient strategies Tolerance amounts for automatic posting ∗ 8-8 probably after release 4.0 Assessment 8 Introduction Aspects Function Sub-function Assessment Interactive reconciliation log Journal entry reconciliation (FI documents) Treatment of differences – mail linkage Treatment of differences – standardizing entry Treatment of differences – comment entry Elimination without posting documents Elimination of IC profit/loss in inventory∗ Stock values by product groups Delivery costs and quantities Cost of goods manufactured or percentages by group/customer Deferred taxes on adjustment to net income for the period/retained earnings MM integration CO-PA integration Elimination of IC profit/loss in transferred assets∗ Asset retirement date and depreciation method data Correction of asset history sheet and income statement ∗ probably after release 4.0 8-9 8 Introduction Aspects Function Sub-function Correction of asset history sheet for retirement/acquisition Correction of depreciation in subsequent years Correction of method change, optional AM integration Reclassification Flexible complex selection rules Flexible complex substitution rules Consolidation of investments External and internal views Statutory bodies EU, US-GAAP, IAS Purchase method consolidation, pooling of interest Proportional consolidation∗ Equity consolidation Amortizing, eliminating differences Eliminating and amortizing hidden reserves Minority shares according to EU and US-GAAP Correcting appropriation of retained earnings in balance sheet and income statement Method assignment, manual and automatic ∗ 8-10 probably after release 4.0 Assessment 8 Introduction Aspects Function Sub-function Assessment Multiple method assignment in multilevel group Automatic transaction – acquisition, step acquisition Automatic transaction – increase/decrease in capitalization Automatic transaction – investment depreciation/amortization Automatic transaction – subsequent consolidation with depreciation/amortization Simulating posting based on transaction data Default posting log with interaction Automatic posting from pushbutton consolidation Reporting historic trends of initial data Standard consolidation logic in metalanguage∗ Additional user logic in metalanguage∗ Push-button consolidation Freely definable task groups Capable of bundling: currency translation Capable of bundling: validation check ∗ probably after release 4.0 8-11 8 Introduction Aspects Function Sub-function Capable of bundling: Interunit elimination Capable of bundling: elimination of IC profit/loss in inventoryIhnen∗ Capable of bundling: elimination of IC profit/loss in transferred assets∗ Capable of bundling: reclassification Capable of bundling: consolidation of investments Capable of bundling: step consolidation, rollup Capable of bundling: validation check of group values Capable of bundling: printing of report package (also separately) ∗ Screen display with various start functions Processing log archiving∗ Reversal functions from screen Change in status resulting from changes in financial reporting data Change in status resulting from changes in customizing ∗ Simulations Versions Variable data categories (e.g. actual, plan, etc.) Variable simulation versions, combinable ∗ 8-12 probably after release 4.0 Assessment 8 Introduction Aspects Function Sub-function Assessment Delta versions per consolidation step Versions for financial reporting data Versions for method assignments Versions for forming consolidation groups Restatement, automatic and with reconsolidation Reporting Delivered standard reporting User-specific report trees/menus Report portfolio with data and definition reports Highlighting function, color coding Exception reporting/top n reporting Mailing report with R/Mail Printing report portfolio with MS Word Standard report painter across SAP accounting system ‘Forms’ – ready-mades for user reports Drilldown in characteristics cube Drilldown through report interface Drilldown in operational SAP applications Drilldown to SAP applications from other systems 8-13 8 Introduction Aspects Function Sub-function Using external hierarchies List display function: Sorting, ranking List display function: Filtering, setting conditions List display function: Graphics (business, portfolio) List display function: resetting threshold values List display function: comments and mail List display function: Excel downloading (Listviewer) List display function: editing layout List display function: data mining∗ Interface: Excel with active R3 link Interface: inSight with active drilldown link Integration and data transfer to ECEIS Group information system Intranet∗ 8-14 Assessment