From separate to streamlined local & group accounting

S/4HANA for Group Reporting

Lars Fleminggard SAP, Thomas Ekbom Capgemini
March 2023
Public
Disclaimer

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All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from
expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates,
and they should not be relied upon in making purchasing decisions.

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S/4HANA for Group Reporting
From separate to streamlined local & group accounting

General introduction
How is Group Reporting different
▪ During the month
▪ Data Collection

Group Reporting highlights

▪ Consolidation
▪ Analytics

Customers – Dec 2022

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S/4HANA for Group Reporting
From separate to streamlined local & group accounting

General introduction
How is Group Reporting different
▪ During the month
▪ Data Collection

Group Reporting highlights

▪ Consolidation
▪ Analytics

Customers – Dec 2022

© 2023 SAP SE or an SAP affiliate company. All rights reserved. | Public 4

S/4HANA for Group Reporting
From separate to streamlined local & group accounting

General introduction
How is Group Reporting different
▪ During the month
▪ Data Collection

Group Reporting highlights

▪ Consolidation
▪ Analytics

Customers – Dec 2022

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 The world of consolidation is changing
Simplification of group reporting in SAP s/4HANA

Traditional Consolidation Applications: Next generation

Separate local and group Accounting Integrated local and group Accounting

Consolidation Tool SAP S/4HANA

SAP S/4HANA
for Group Reporting
Data Warehouse &
Spreadsheets ETL-Tools Spreadsheets

SAP Non-SAP Local Accounting

Systems Systems

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The consolidation process

During month Data preparation

IC Matching & Data validation
Analysis
Reconciliation Currency translation Financial statements
Investment Register Topside entries Cash flow statements
IC reconciliation Ad-hoc analyses

Data collection Consolidation Analytics

S/4HANA transactional Real time IC eliminations Integration with SAC
and master data Cons. of investments Restatements
Non-S/4HANA data Matrix consolidation
Non-financial data

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Intercompany Matching and Reconciliation (ICMR)

Subsidiary A

Non-S/4 Subsidiary D
Real-Time Continuous
Upload
Subsidiary B

Local close Group close

Subsidiary C Non-S/4 Subsidiary E

▪ Transactional-level matching in real-time eliminating cumbersome ETL processes

▪ Matching and reconciliation rules set up by finance users without IT
▪ Fully automated process with built-in workflow to facilitate cross-team communication
▪ One IC tool across local and group close
▪ IC transactional matching and variances in local close drives IC elimination in group close

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 ICMR-triggered elimination posting

Two-sided elimination based on reclassification

Offset the
Eliminate elimination to
difference clearing
data set 1 account for
Elimination by dataset 1
Data set 2 re-classification
The difference is on total level aggregated by clearing
Data set 1 Offset the accounts
Eliminate elimination
to clearing
data set 2 account for
data set 2

difference Breakdown by difference category

Two-sided elimination triggered by ICMR Offset the
elimination to and reason code
clearing
Difference split by reason code Eliminate account for
data set 1 Other
data set 1 diff.
Elimination triggered by
Data set 2
+
Translatio
ICMR n caused Transactio
difference
Data set 1 Offset the
n caused
difference
Eliminate elimination – Reason
Code XX
to clearing
data set 2 account for
Matching and reconciliation data set 2

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Comparison – Group Reporting and Consolidation Tool
Overall purpose – Secure that the right data is input to the consolidation process

Group Reporting Investment Register Disclosure Management Foundation Consolidation Tool Acquisition Register

PPA Registration
PPA Registration Goals and Objectives
Efficient and pro-active reconciliation
Be in Control
SAP Group Reporting Consolidation Tool
Analysis and Reporting Full Transparency Data Collection
Master data setup Efficient Processes Master data setup
Master data updates Master data updates
Continuous Compliance
SAP Group Reporting Consolidation Tool Acquisition Register

Actual transactions as input to the Consolidation Data Preparation Acquisition Register as input to
Consolidation of Investments logic Acquisition Eliminations logic

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The consolidation process

During month Data preparation

IC Matching & Data validation
Analysis
Reconciliation Currency translation Financial statements
Investment Register Topside entries Cash flow statements
IC reconciliation Ad-hoc analyses

Data collection Consolidation Analytics

S/4HANA transactional Real time IC eliminations Integration with SAC
and master data Cons. of investments Restatements
Non-S/4HANA data Matrix consolidation
Non-financial data

© 2023 SAP SE or an SAP affiliate company. All rights reserved. | Public 13

Integrated harmonized data

S/4HANA

Group accounting

010.2020 A01

FULL ENTITY DATA

AUDIT TRAIL RELEASE

Local accounting

Single financial truth – universal journal

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S/4HANA data

S/4HANA

Corporate group accounting

Global/local operational accounting

What are my Are there

numbers after documents not
release? yet released?

Documents
from prior periods
Cut-off date/time not released?
of last release?
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S/4HANA for Group Reporting
From separate to streamlined local & group accounting

General introduction
How is Group Reporting different
▪ During the month
▪ Data Collection

Group Reporting highlights

▪ Consolidation
▪ Analytics

Customers – Dec 2022

© 2023 SAP SE or an SAP affiliate company. All rights reserved. | Public 16

The consolidation process

During month Data preparation

IC Matching & Data validation
Analysis
Reconciliation Currency translation Financial statements
Investment Register Topside entries Cash flow statements
IC reconciliation Ad-hoc analyses

Data collection Consolidation Analytics

S/4HANA transactional Real time IC eliminations Integration with SAC
and master data Cons. of investments Restatements
Non-S/4HANA data Matrix consolidation
Non-financial data

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Two Processes – One Application Logic
Intercompany Sales

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 Universal Parallel Accounting - Step by Step
Consolidated view through SAP S/4HANA Group Reporting
Financial Consolidation
• SAP S/4HANA external Companies
Group

via flexible file upload, GRDC, etc.

Consolidated Consolidated group view • Currency translation methods
• Eliminations and Consolidations
Local Accounting

Common Accounting Principle

Group Accounting Principle  IFRS
Ledger 2
(Entry View)

Functional curr: EUR

Accounting-side entity close
 Local accounting principles
Ledger 1 German Entity French Entity Swiss Entity US Entity

• Currency: Eur • Currency: Eur • Currency: CHF • Currency: USD

• CoA DE • CoA FR • CoA CH • CoA US
• country: HGB • country: FR GAAP • country: CH GAAP • country: US GAAP * SAP Note 2894297
• Calendar: K4 • Calendar: 4-4-5 ** • Calendar: K4 • Calendar: K4 ** 4-4-5 mapping: Future direction

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 Universal Parallel Accounting - Step by Step
Consolidated view through SAP S/4HANA Group Reporting
Financial Consolidation
• SAP S/4HANA external Companies
ACDOCU
Group

Consolidated Consolidated group view via flexible file upload, GRDC, etc.
• Currency translation methods
• Eliminations and Consolidations

CE 2202
Accounting

Common Accounting Principle

OP 2021 FPS1
→ Group Reporting Preparation Ledger  IFRS
ACDOCA

Ledger 2  Aggregation of companies

Entry View GR fields  Group Dimensions
Local

Functional curr: EUR

Accounting-side entity close
 Local accounting principles
Ledger 1 German Entity French Entity Swiss Entity US Entity

• Currency: Eur • Currency: Eur • Currency: CHF • Currency: USD

• CoA DE • CoA FR • CoA CH • CoA US
• country: HGB • country: FR GAAP • country: CH GAAP • country: US GAAP * SAP Note 2894297
• Calendar: K4 • Calendar: 4-4-5 ** • Calendar: K4 • Calendar: K4 ** 4-4-5 mapping: Future direction

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 Deloitte – Finance 2025 → “There is no close”

Universal Parallel Accounting - Step by Step

Pre-consolidation view allows for real time group view including interco elimination (at cost)
Consolidated Group Reporting
• Non S/4 Companies via GRDC.
Group

Consolidated Consolidated group view • Currency translation methods

• Eliminations and Consolidations

CE 2302
Group management view in real time
OP 2022 • Intercompany eliminations on the fly
Ledger 3 Transactional Consolidation view • Multiple valuation principles

CE 2202
Local Accounting

Common Accounting Principle

OP 2021 FPS1  IFRS
Ledger 2 Group Accounting Principle/ Group Reporting Preparation Ledger  Aggregation of companies
 Group Dimensions

Functional curr: EUR

Accounting-side entity close
 Local accounting principles
Ledger 1 German Entity French Entity Swiss Entity US Entity

• Currency: Eur • Currency: Eur • Currency: CHF • Currency: USD

• CoA DE • CoA FR • CoA CH • CoA US
• country: HGB • country: FR GAAP • country: CH GAAP • country: US GAAP
• Calendar: K4 • Calendar: 4-4-5 • Calendar: K4 • Calendar: K4
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 Deloitte – Finance 2025 → “There is no close”
Global Intercompany Value Chains require End-2-End Value Chain Visibility

Advanced Parts from

Intercompany
Sales Order Germany Advanced
Intercompany
Sales Order

Assembly
Parts from China
Sales in US
Headquarter
in US Assembly in Advanced
in Germany Intercompany
Turkey Sales Order
Sales Order
IT-
Services Advanced
from India Intercompany
Sales Order

I want to see the consolidated

COGS and margins along the
entire value chain to make the
right business decision and to
Parts
steer the corporate structure
from
Brasil
Advanced
Intercompany
Sales Order
I want to consolidate real-time with
eliminated intercompany sales,
providing visibility on transfer prices in
addition to a consolidated group view
with cost breakdown © SAP SE OR AN SAP AFFILIATE COMPANY. ALL RIGHTS RESERVED. 22
 Revenue

Consolidated
Group

Footrpint
Carbon
Material
(components)
Revenue Manufacturing US

Group
Legal
Co2 E.
Manufacturing BR
Materials Manufacturing GE
(Components) Manufacturing CN _____
Manufacturing EBIT: 12m€
_____________
EBIT 1,5m€ 3m$ 30kT

Assembly
Parts from China
Sales in U.S.
Headquarters
in U.S.
in Germany Assembly in
Turkey
IT
services
from India

Revenue

Co2 E.
Group
Legal
Parts Materials
Revenue from (Components)
Group
Legal
Co2 E.

Revenue
Brazil

Co2 E.
Materials

Group
Legal
Manufacturing
(Components) Transportation___________ Materials
(Components)
Manufacturing EBIT 2m€ 79m ¥. 91kT
_____________ Manufacturing
EBIT 2,5m€ 9mB$. 23kT Transportation___________
EBIT 2m€ 6m € 77kT
The consolidation process

During month Data preparation

IC Matching & Data validation
Analysis
Reconciliation Currency translation Financial statements
Investment Register Topside entries Cash flow statements
IC reconciliation Ad-hoc analyses

Data collection Consolidation Analytics

S/4HANA transactional Real time IC eliminations Integration with SAC
and master data Cons. of investments Restatement
Non-S/4HANA data Matrix consolidation
Non-financial data

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Integrated accounting and planning / analytics
Group accountant Group controller
SAP Analytics Cloud
S/4HANA
Group Reporting Import master +
actual data
Export planned
Reports/charts
ACDOCU data
Corporate planning
(FS items, consolidation units)

Import master +
S/4HANA ACDOCA ACDOCP
actual data
local accounting Export planned
Reports/charts
data
Entity planning
(GL accounts, company codes)

View live data

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Restatement – Business Requirements

▪ Need to restate data already published due to changes in

– Accounting standards
Reporting
New Old Change
– Legal group structures
– Management organizations ~~~~~~

▪ Comparison between years/periods (e.g. prior year comparison) ~~~~~~

– New to old structure ~~~~~~

▪ Different types of restatements are needed, which require a change in

– Master data
– Transaction data
– Configuration
▪ Restated data for the future
– Merged into the standard version during balance carry forward
▪ Simulation of different scenarios

What If?

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Example of restatements using the extension versions
Restatement of 2022
(extension version,
with IFRS XX)
Decison to January closing February closing
adopt IFRS XX 2022 Year End closing
(standard version, without (standard version, (standard version,
as of the with IFRS XX) with IFRS XX)
1.1.2023 IFRS XX)

14/09/2022 02/01/2023 20/01/2023 31/01/2023 28/02/2023 Time

Posting periods
Year 2022 Year 2023
Period 000-012 Period 000 Period 001 Period 002
Restatement delta with XX

Regular closing without IFRS XX Regular closing with IFRS XX

❑ In 2022 the Standard version consolidates without IFRS XX Standard Version

❑ A new Extension version is defined to consolidate 2022 with IFRS XX Extension Version

❑ The restated 2022 closing balances are carried forward to the Standard version in 2023

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S/4HANA for Group Reporting
From separate to streamlined local & group accounting

General introduction
How is Group Reporting different
▪ During the month
▪ Data Collection

Group Reporting highlights

▪ Consolidation
▪ Analytics

Customers – Dec 2022

© 2023 SAP SE or an SAP affiliate company. All rights reserved. | Public 28

SAP S/4HANA for group reporting customers – Dec 2022

Automotive + Machinery
4% Banking + Insurance

100+
Telco + High Tech 11%
15%

live customers
Chemicals + Oil & Gas
8%
Retail + Utilities
18% Consumer products
8%

500+ Healthcare + Life Science

customers currently 7%
implementing Prof. Services
14%
Mill Products Media + Sports
12% 3%
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Your thoughts?
Contact:
Lars Fleminggard
Solution Advisor CFO Office
SAP

+46 70 356 62 17
Lars.fleminggard@sap.com
Follow us

www.sap.com/contactsap

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any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation,
and SAP SE’s or its affiliated companies’ strategy and possible future developments, products, and/or platforms, directions, and
functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason
without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or
functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ
materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, and they
should not be relied upon in making purchasing decisions.
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