What is consolidation in SAP FI-LC - Consolidation?

SAP Term: consolidation

• Component: FI-LC

• Component Name: Consolidation

• Description: An accounting procedure whereby the financial operating results of the companies within the group are combined to create overall results for the group in accordance with the entity theory. According to the entity theory, the consolidated financial statements must portray the assets, the financial and income position of the group, as if all of the companies were a single corporation. To accomplish this, all transfers of assets and services, as well as all financial relationships between the consolidated companies that affect the consolidated financial statement, must be eliminated. The consolidation activities include the following steps: of investments Elimination of payables/receivables Elimination of intercompany profit/loss Elimination of revenue/expense Elimination of investment income Reclassifications In , these steps are represented by their corresponding consolidation entries; these are divided into eliminating entries and subgroup-dependent consolidation entr

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• Key Concepts: 
  Consolidation is a process used to combine financial data from multiple legal entities into a single set of financial statements. The FI-LC Consolidation component of SAP allows companies to consolidate their financial data from multiple legal entities into one set of financial statements. This component also provides the ability to analyze and report on consolidated financial data. 
  
  How to use it: 
  The FI-LC Consolidation component of SAP can be used to consolidate financial data from multiple legal entities into one set of financial statements. This component provides the ability to analyze and report on consolidated financial data. The user can define the consolidation rules, such as which accounts should be included in the consolidation, and how the data should be combined. The user can also define the currency conversion rules for the consolidation process. 
  
  Tips & Tricks: 
  When using the FI-LC Consolidation component of SAP, it is important to ensure that all of the necessary accounts are included in the consolidation process. It is also important to ensure that all of the necessary currency conversion rules are defined correctly. Additionally, it is important to ensure that all of the necessary reports are generated in order to properly analyze and report on consolidated financial data. 
  
  Related Information: 
  For more information about the FI-LC Consolidation component of SAP, please refer to the official SAP documentation. Additionally, there are many online resources available that provide tutorials and tips for using this component.