New Reporting logic and posting level needs - a quick summary

In SAP Group Reporting's new reporting logic, posting levels play a crucial role in determining how data is consolidated and reported. They provide a flexible way to categorize and manage financial data based on its origin and purpose. Here's a breakdown of how posting levels work in the new logic:

Understanding Posting Levels

Posting levels categorize different types of financial data within Group Reporting. They are used to differentiate between:

• Source Data: Data coming directly from subsidiary systems (e.g., general ledger balances).
• Adjustments: Manual adjustments made to the reported data (e.g., reclassifications, eliminations).
• Consolidation Entries: Entries generated automatically during the consolidation process (e.g., elimination of intercompany transactions).

Key Posting Levels in Group Reporting:

• Blank, 00, 01, 0C, 10: Represent data as reported by the subsidiary. This includes original reported data, corrections, and standardized entries.
• 20: Used for pairwise eliminations between consolidation units. This level handles the elimination of intercompany transactions and balances.
• 30: Allows for manual postings at the consolidation group level. This is useful for adjustments that only apply to a specific group (e.g., goodwill allocation).

How Posting Levels Impact Consolidation

Posting levels influence how data is aggregated and presented in consolidated reports. Here are some examples:

• Eliminations: Posting level 20 ensures that intercompany transactions are eliminated correctly. The system identifies the appropriate partner unit and automatically generates elimination entries.
• Group Adjustments: Posting level 30 allows for adjustments to be made at the group level without affecting the individual subsidiaries' data. This is useful for applying group-wide accounting policies or making adjustments for specific reporting purposes.
• Drill-Down Reporting: Posting levels enable drill-down reporting. You can trace consolidated figures back to the original source data or adjustments made at different levels.

Benefits of Using Posting Levels

• Improved Data Accuracy: By categorizing data, posting levels help ensure that consolidation adjustments and eliminations are applied correctly.
• Increased Transparency: Provides a clear audit trail of how consolidated figures are derived.
• Enhanced Flexibility: Allows for adjustments and entries to be made at different levels, providing greater control over the consolidation process.
• Simplified Reporting: Enables the creation of reports that focus on specific types of data (e.g., only eliminations or only group adjustments).

Example:

Imagine Company A owns 80% of Company B. Company B sells goods to Company A for $100,000. In the consolidated statements, this intercompany sale needs to be eliminated.

• Company A: Records a purchase of $100,000 (posting level blank).
• Company B: Records a sale of $100,000 (posting level blank).
• Consolidation: The system generates an elimination entry at posting level 20 to eliminate the intercompany sale and profit.

By using posting levels, Group Reporting ensures accurate consolidation and provides detailed insights into the financial performance of the entire group.