What is consolidation of investments in SAP FI-LC - Consolidation?

SAP Term: consolidation of investments

• Component: FI-LC

• Component Name: Consolidation

• Description: The consolidation of investments C/I offsets the investment account of one or more parent companies against each parent company's share in the stockholders' equity of the subsidiaries, joint venture and affiliated companies that are included in consolidation. This process prevents these assets from appearing "in duplicate" on the consolidated financial statements. The system supports all common consolidation of investments methods. The following consolidation activities are recognized and performed automatically: First consolidation Subsequent consolidation Step acquisition Increase or reduction in capitalization Change in indirect investment Transfer within the group Divestiture outside the group Amortization of investments The consolidation of investments is performed by subgroup. This means that the C/I entries posted for the corporate group do not apply to any subordinate subgroups, in contrast to the elimination of intercompany payables and receivables. Therefore, c

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• Key Concepts: 
  Consolidation of investments is a process used to combine the financial statements of multiple companies into one set of consolidated financial statements. This process is used to eliminate intercompany transactions and to present a single, unified view of the group’s financial position. In SAP, this process is handled by the FI-LC Consolidation component. 
  
  How to use it: 
  The FI-LC Consolidation component in SAP allows users to consolidate investments from multiple companies into one set of consolidated financial statements. This component provides users with the ability to define consolidation rules, create consolidation plans, and generate consolidated financial statements. 
  
  Tips & Tricks: 
  When using the FI-LC Consolidation component in SAP, it is important to ensure that all intercompany transactions are eliminated before generating the consolidated financial statements. Additionally, it is important to ensure that all consolidation rules are properly defined and that all consolidation plans are properly created. 
  
  Related Information: 
  For more information on the FI-LC Consolidation component in SAP, please refer to the official SAP documentation at https://help.sap.com/viewer/product/FI_LC_CONSOLIDATION/latest/en-US.