Thursday, November 27, 2008

PerformancePoint Server Information by Ajay Singh

Details on Consolidation from the BI VPC 6.0.

How Consolidation works in Performance Point Server:

Financial model with shares consolidation: This uses financial model with shares since it requires ownership information which derives from the shares calculation. There are five rules templates for statutory consolidation in FI. They are Inter-company rule for Profit/Loss, Inter-company rule for investment, Inter-company rule for Equity and Inter-company rule for Balance Sheet. One can map a leaf account to the model property that used by the rule. The leaf account will then be used for calculating minority interest, investment and elimination related transactions. Users can also write their own rules to accommodate more statutory requirements. The financial model with shares consolidation only supports one level entity hierarchy, and shares calculation will generate all the ownership information for each entity relative to the parent entity which in term generates a flat hierarchy.

If company A owns 90% of company B, there will be two leaf entities (company B and company A) and one consolidated entity Consol. After shares calculation company A has holding consolidation method and company B has Full consolidation method. Once the method is determined for each entity within the hierarchy, we need to load fact table data for each leaf entity. Consolidation process involves the following three steps:

  1. Shares Calculation: To calculate the ownership and control for each sub entity.
  2. Reconciliation (optional): To record any difference occurred between inter companies.
  3. Consolidation: To record elimination for inter-company transactions based on the type of the accounts, consolidation methods and flow type (for BS accounts only).
  4. Currency Conversion (optional): Consolidation can also do currency conversion but it’s optional.

Financial model without shares consolidation: This uses financial model without shares since we assume 100% ownership between parent and child entities. The model property Consolidation Balance Account is used to record the elimination for each account. Non statutory consolidation supports staged hierarchy so that parent entities can have multiple levels. The 100% elimination will take place for all the intercompany transactions.

PerformancePoint Server Information by Ajay Singh

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