What is change of method in SAP FI-LC - Consolidation?

SAP Term: change of method

• Component: FI-LC

• Component Name: Consolidation

• Description: A change of the consolidation method used for a company from one statement closing to the next. The need for changing the method often arises when a company buys or sells shares of another company. Typically, a change occurs from the equity method or proportional consolidation method to the purchase method, or vice versa. There can be changes from the valuation at cost of the investment to either the equity method or purchase method, or vice versa.

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• Key Concepts: 
  Change of Method in FI-LC Consolidation is a process that allows companies to change the method used to calculate the consolidation of their financial statements. This process is used when a company wants to switch from one method of consolidation to another, such as from the equity method to the proportional consolidation method. The change of method process ensures that the financial statements are accurately consolidated and reported in accordance with the new method.
  
  How to use it: 
  To use the change of method process, companies must first determine which method they want to switch to. Once this is done, they must then enter the relevant data into the system and configure it according to the new method. After this is done, the system will automatically calculate and report the financial statements according to the new method.
  
  Tips & Tricks: 
  When using the change of method process, it is important to ensure that all relevant data is entered correctly into the system. This will ensure that the financial statements are accurately consolidated and reported according to the new method. Additionally, it is important to regularly review and update any changes made to ensure that the system remains up-to-date with any changes in accounting standards or regulations.
  
  Related Information: 
  The change of method process is closely related to other processes such as currency translation and intercompany eliminations. It is important for companies to understand how these processes interact with each other in order to ensure accurate financial reporting. Additionally, companies should also be aware of any applicable accounting standards or regulations that may affect their financial reporting.