How To Fix UCF6405 - First consolidation adjustment: no goodwill from first consolidation

SAP Error Message - Details

• Message type: E = Error

• Message class: UCF6 - Messages for Consolidation of Investments

• Message number: 405

• Message text: First consolidation adjustment: no goodwill from first consolidation

What causes this issue?

You have entered the <ZK>First Consolidation Adjustment</> activity
(activity number &V3&) for investee unit &V1&. There is no goodwill from
the first consolidation for this investee unit in consolidation group
&V2&.

System Response

The system generates the goodwill entry in the additional financial data
for the activity <ZK>First Consolidation Adjustment</> like in a first
consolidation:
<ZK>Negative Goodwill</> indicator: In accordance with the debit/credit
sign of the differential
Treatment of Goodwill: According to the setting for positive or negative
goodwill in the consolidation of investments method

How to fix this error?

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message UCF6405 - First consolidation adjustment: no goodwill from first consolidation ?

  The SAP error message UCF6405, "First consolidation adjustment: no goodwill from first consolidation," typically occurs in the context of financial consolidation processes within SAP, particularly when dealing with the consolidation of subsidiaries or business units. This error indicates that there is an issue related to the calculation or recognition of goodwill during the first consolidation of a subsidiary.
  Cause:
  
  Missing Goodwill Data: The error often arises when there is no goodwill recorded for the entity being consolidated. Goodwill is the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination.
  Incorrect Configuration: The configuration settings for the consolidation process may not be set up correctly, leading to the system not recognizing or calculating goodwill.
  Data Entry Issues: There may be missing or incorrect data entries in the master data or transaction data related to the acquisition of the subsidiary.
  Timing Issues: The consolidation process may be executed before the necessary data for goodwill calculation is available or updated.
  
  Solution:
  
  Check Goodwill Data: Ensure that the goodwill data for the subsidiary is correctly entered in the system. This includes verifying the acquisition date, purchase price, and fair value of net assets.
  Review Configuration Settings: Check the configuration settings in the SAP system related to consolidation. Ensure that the settings for goodwill calculation are correctly defined.
  Data Validation: Validate the data entries for the subsidiary being consolidated. Ensure that all necessary financial data is complete and accurate.
  Re-run Consolidation: After correcting any issues, re-run the consolidation process to see if the error persists.
  Consult Documentation: Refer to SAP documentation or help resources for specific guidance on handling goodwill in the context of your version of SAP.
  Seek Support: If the issue persists, consider reaching out to your SAP support team or consulting with an SAP expert who specializes in financial consolidation.
  
  Related Information:
  
  Goodwill Calculation: Understanding how goodwill is calculated and recorded in financial statements is crucial. Goodwill arises when a company acquires another company for more than the fair value of its net identifiable assets.
  Consolidation Process: Familiarize yourself with the overall consolidation process in SAP, including the steps involved in consolidating financial statements and the role of different modules (e.g., SAP BPC, SAP S/4HANA).
  SAP Notes: Check for any relevant SAP Notes that may address this specific error or provide additional troubleshooting steps.
  
  By addressing the underlying causes and following the suggested solutions, you should be able to resolve the UCF6405 error and successfully complete the consolidation process.