What is divestiture in SAP EC-CS - Consolidation?

SAP Term: divestiture

• Component: EC-CS

• Component Name: Consolidation

• Description: An activity in which a consolidation unit sells all or part of its investment in another consolidation unit to an investor outside of the consolidation group. If the investment is sold to another unit within the same group, this is referred to as a transfer. It is therefore possible that an transfer within a hierarchy of consolidation groups may need to be treated as a divestiture.

Smart SAP Assistant

• Key Concepts: 
  Divestiture is a process in SAP EC-CS Consolidation that allows companies to separate their financials into two or more entities. This process is used when a company wants to separate its financials into different legal entities, such as when a company is being sold or spun off. The divestiture process involves creating a new legal entity, transferring the assets and liabilities of the original entity to the new entity, and then closing the original entity. 
  
  How to use it: 
  In SAP EC-CS Consolidation, divestiture is used to separate the financials of a company into two or more entities. To begin the process, the user must create a new legal entity in the system. Then, the user must transfer all of the assets and liabilities of the original entity to the new entity. Finally, the user must close the original entity. 
  
  Tips & Tricks: 
  When performing a divestiture in SAP EC-CS Consolidation, it is important to ensure that all assets and liabilities are properly transferred from the original entity to the new entity. Additionally, it is important to ensure that all transactions are properly recorded in both entities. 
  
  Related Information: 
  For more information on divestiture in SAP EC-CS Consolidation, please refer to SAP Help documentation or contact your local SAP support team.