What is consolidation of investments method in SAP EC-CS - Consolidation?

SAP Term: consolidation of investments method

• Component: EC-CS

• Component Name: Consolidation

• Description: Determines how consolidation of investments C/I treats goodwill, negative goodwill, fair value adjustments, and so on. In each C/I method you define the accounting technique to be used. You assign the C/I methods to the consolidation units. If a consolidation unit belongs to multiple consolidation groups, you can also assign different C/I methods to such a consolidation unit.

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• Key Concepts: 
  The consolidation of investments method is a feature of the SAP EC-CS Consolidation component. It allows companies to consolidate their investments in subsidiaries and other entities into a single financial statement. This method is used to accurately reflect the financial position of the parent company and its subsidiaries. 
  
  How to use it: 
  The consolidation of investments method is used to combine the financial statements of multiple entities into one consolidated statement. This is done by taking the net assets of each entity and combining them into one total figure. The consolidated statement will then reflect the total assets, liabilities, and equity of the parent company and its subsidiaries. 
  
  Tips & Tricks: 
  When using the consolidation of investments method, it is important to ensure that all entities are using the same accounting standards and methods. This will ensure that the consolidated statement accurately reflects the financial position of the parent company and its subsidiaries. Additionally, it is important to ensure that all transactions are properly recorded in order to avoid any discrepancies in the consolidated statement. 
  
  Related Information: 
  The consolidation of investments method is part of the SAP EC-CS Consolidation component, which also includes features such as currency translation, intercompany eliminations, and equity adjustments. Additionally, this component can be used to generate reports such as consolidated income statements, balance sheets, and cash flow statements.