Group Reporting posting levels and FS items detail the relation for auto accounts determination

In SAP Group Reporting, the relationship between posting levels and FS items is crucial for automatic account determination, especially during consolidation. This relationship ensures that the system correctly identifies the accounts to be used for various consolidation adjustments and eliminations. Here's how it works:

1. FS Item Roles:

• Each FS item in your consolidation chart of accounts can be assigned a specific role. These roles define the purpose of the FS item in the consolidation process.
• Examples of roles: Elimination Target, Group Equity, Deferred Tax, etc.

2. Rules and Posting Levels:

• Consolidation rules use these roles to determine the target accounts for automatic postings.
• For example, a rule might specify that when eliminating intercompany receivables/payables (posting level 20), the system should post the elimination entry to the FS item with the role Elimination Target.

3. Automatic Account Determination:

• When the consolidation process runs, the system analyzes the data based on the posting levels.
• For entries with posting level 20 (eliminations), it identifies the relevant FS items involved in the transaction.
• Using the predefined rules and FS item roles, the system automatically determines the correct target accounts for the elimination entries.

Example:

Imagine you have the following setup:

• FS Item 110000 (Receivables): No specific role assigned.
• FS Item 210000 (Payables): No specific role assigned.
• FS Item 990000 (Intercompany Elimination): Assigned the role Elimination Target.
• Consolidation Rule: Defines that intercompany receivables/payables eliminations (posting level 20) should be posted to the Elimination Target account.

Now, if Company A has a receivable of $10,000 from Company B (posting level 01), and Company B has a corresponding payable of $10,000 to Company A (posting level 01), the consolidation process will:

1. Identify the intercompany transaction: Based on the matching receivables and payables at posting level 01.
2. Trigger the elimination rule: Because it involves intercompany balances.
3. Determine the target account: The rule specifies Elimination Target, which is assigned to FS item 990000.
4. Post the elimination entry: The system automatically generates an entry at posting level 20 to debit FS item 110000 (Receivables) and credit FS item 210000 (Payables) by $10,000, with the corresponding offsetting entry to FS Item 990000 (Intercompany Elimination).

Benefits of this approach:

• Reduced manual effort: The system automatically determines the correct accounts, minimizing manual intervention.
• Improved accuracy: Consistent application of rules ensures accuracy in consolidation adjustments.
• Increased efficiency: Streamlines the consolidation process and saves time.
• Better auditability: Provides a clear audit trail of how accounts are determined and used in consolidation.

By understanding the relationship between posting levels and FS items, you can effectively configure Group Reporting for accurate and efficient consolidated financial reporting.