Invest Elimination in SAP - do they post with level 20 or 30 - a brief

In SAP Group Reporting, investment eliminations are generally posted with level 20. This is because investment eliminations are a fundamental aspect of consolidation and need to be reflected at the group level.

Here's why level 20 is used:

• Group-wide Impact: Investment eliminations affect the consolidated financial statements of the entire group. They remove the investment of the parent company in its subsidiaries and the corresponding equity of the subsidiaries to avoid double-counting.
• Consolidation Principle: Level 20 aligns with the principle of consolidation, ensuring that the financial statements present the group as a single economic entity.
• Uniformity: Using level 20 for investment eliminations ensures consistency and comparability across different consolidation groups within the organization.

How it works:

When you run consolidation, the system automatically generates elimination entries based on the ownership structure and the consolidation method. These entries are posted with level 20 to eliminate the investment and equity accounts.

Example:

If Company A owns 80% of Company B, during consolidation, 80% of Company B's equity will be eliminated against the investment held by Company A. This elimination entry will be posted with level 20.

Exceptions:

While level 20 is the standard for investment eliminations, there might be specific scenarios where level 30 could be considered:

• Partial Eliminations: If a specific consolidation group requires a unique elimination adjustment that deviates from the standard group-level elimination, level 30 might be used.
• Specific Reporting Requirements: If a particular group needs to present its investment eliminations differently for specific reporting purposes, level 30 could be employed.

However, these exceptions are rare, and level 20 remains the primary posting level for investment eliminations in most cases.

By understanding the logic behind posting levels and the principles of consolidation, you can ensure accurate and meaningful financial reporting in SAP Group Reporting.