What is book value method in SAP EC-CS - Consolidation?

SAP Term: book value method

• Component: EC-CS

• Component Name: Consolidation

• Description: A variant of consolidation of investments. The purchase method and proportional consolidation have two variants: Book value method Revaluation method When the book value method is used in the proportional or purchase methods of consolidation, the method records and clears fair value adjustments hidden reserves only up to the value that pertains to the corporate group. The equity method has the following two variants: One-line consolidation also called book value method Two-line consolidation also called proportion of equity method When the one-line variant is used in the equity method, the investment item of the immediate upper unit remains unchanged during first consolidation, and the differential is typically stated in the notes to the financial statements.

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• Key Concepts: 
  The book value method is a consolidation method used in the EC-CS Consolidation component of SAP. It is used to calculate the consolidated balance sheet of a group of companies. The book value method takes the book values of the individual companies and adds them together to create the consolidated balance sheet. 
  
  How to use it: 
  To use the book value method, first enter the book values of each individual company into the EC-CS Consolidation component. Then, select the “Book Value Method” option from the consolidation methods menu. This will add up all of the individual company’s book values and create a consolidated balance sheet. 
  
  Tips & Tricks: 
  When using the book value method, it is important to make sure that all of the individual company’s book values are up-to-date and accurate. This will ensure that the consolidated balance sheet is accurate and reliable. 
  
  Related Information: 
  The book value method is just one of many consolidation methods available in SAP’s EC-CS Consolidation component. Other methods include the equity method, proportional consolidation, and elimination entries. Each method has its own advantages and disadvantages, so it is important to choose the right one for your needs.