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Author's profile photo Stephane NEUFCOURT

SAP S/4HANA for group reporting: Restatements and Simulations

Restatements and simulations with SAP S/4HANA for group reporting’s extension versions

Whether you need to reconsolidate previous years because of a change in accounting standard or want to preview the impact of a potential acquisition, restatements and simulations are key elements in your consolidation process. With the enhancement of our extension version capabilities, SAP S/4HANA for group reporting provides you a flexible way to restate and simulate your group financial statements.

This blog describes the following elements:

  • Restatements
  • Simulations
  • Introducing extension versions for restatements and simulations
  • Introducing version stacks
  • Configuration of extension versions
  • Enhancement of other functions related to extension versions


Restatements

Restatement is the process of restating the consolidated financial statements you already published. You usually carry out a restatement because of a change in accounting standards, in group structures or management organizations, or in reported data. The restatement is necessary to make possible the comparison between different years and periods.

For example, you adopt a new accounting standard in the current year. You restate the consolidated financial statements of the previous year with the new accounting standard. You can then compare the statements from previous year and current year.

Also, you can perform different types of restatements, which require a change in master data, transaction data, or configuration. As restated data sometimes becomes the norm for the future, restated data sometimes needs to be “merged” into the standard version during balance carry forward. Finally, previously published data must be secured (financial data, logs, task status, master data, configuration).


Simulations

Simulation is the process of simulating a business scenario when you want to answer a “what if” question – when you want to compare the results of the simulation with the current consolidated financial statements. For example, let’s say that you acquire new companies in the current year. You want to know the impact of this acquisition. You can create a simulation for the current year without your acquired companies so that you can compare the results with the actual data from the current year with the acquired companies. With this, you can evaluate the impact of this acquisition. Simulations are often processed like restatements.


Introducing extension versions for restatements and simulations

To help you restate an existing consolidation or simulate a new consolidation case, you can use the extension version feature of SAP S/4HANA for group reporting:

  • Create the extension version using the original version as the reference version
  • Your extension version can be consolidated independently from the reference version at a different point in time (see the diagram below)
  • Since the restatement or simulation occurs in its own separate extension version, all the data from the original version is secured and remains unchanged

You can create the extension version on top of its reference version in a version stack, which only stores delta values. The version stack doesn’t store all data records of the consolidated financial statements but only the ones needed to obtain the restated or simulated values. You can also consolidate the extension version using a different configuration than the reference version. For example, you’re able to use a different group structure or different tasks and methods in SAP S/4HANA for group reporting data and consolidation monitors.

To support restatement and simulation, you can now:

  • Store values in local currency, transaction currency, and quantity in extension and extension versions for group currency. For example, you can upload restated data in local currency in the extension version, and adjust the group share percentage in the extension version
  • Execute the consolidation tasks of group currency extension and extension versions independently from their (reference) standard version.
  • Define different special versions, and different tasks for the group currency extension and extension versions. For example, you can use a different group structure to simulate the group statements without a subsidiary acquisition, and have a new reclassification task only for the extension version.
  • Define a destination version and a deviating sub item for balance carry forward. For example, the restated balances are carried forward into the standard version on a specific sub item.


Introducing version stacks

The version stack comprises a group of consolidation versions that are linked together by each of their respective reference version settings. Each version in a version stack represents a different view of the consolidation financial statements, and these views correspond to specific scenarios.

Several group currency extension and extension versions can be defined and linked to the same standard (reference) version, you can therefore stack different restatements or different simulations. Across the version stack, only delta values are calculated.

Here are two examples that illustrate the combination of extension versions and version stacks.

Example #1

You need to restate your standard (reference) consolidation Z10 in euros both for a new IFRS standard, and for a management reorganization.

For this, you can:

  • Create two extension versions (Z14, Z15) stacked on top of your standard version Z10
  • Simulate a case where a subsidiary wasn’t acquired by creating an extension version (Z16) on top of your standard (reference) version Z10


Example #2

You need to restate the group statements in multiple group currencies (EUR, USD). You can define additional extension versions (in the example below Z24, Z25) on top of the group currency extension version (Z20). This results in two different branches in the version stack. If you restate first your consolidation in EUR by posting restatement entries in local currency in the extension versions Z14 and Z15, you afterwards copy these restatements entries in the extension versions of the second branch (Z24, Z25).


Configuration of extension versions

As shown in the following screenshot, new settings are available for the extension version:

(1) An extension version can now store values in group currency, and also in local currency, transaction currency, and quantity.

(2) You can link the execution of the tasks for your extension version to its reference version or choose to run them manually (in this case, they’re not automatically run with its reference version).

(3) An extension version can be assigned to special versions that are different from those in its reference version.


Enhancement of other functions related to extension versions

With the extension version for restatements and simulations, you also benefit from enhancements on the following related functions.

  • Master data and configuration
    • New settings for the version (run mode, allow for local currency, transaction currency, quantity changes)
    • New configuration for Balance Carry Forward (destination version)
    • Additional checks on the master data of the consolidation unit
    • New deviating sub item for balance carry forward on the master data of sub-item
    • Additional consistency checks of settings across versions of the same stack (for example, auto reversal in document types)
  • Monitors and task execution
    • Independent execution of tasks in extension versions (with Run Mode 1 “Manual”)
    • Period control across consolidation versions (you can’t close the period in the monitor if the monitor
    • of the reference version isn’t closed)
    • Versions of the same stack can have different tasks groups
  • Flexible upload and Post Group Journal Entries app
    • Enhanced flexible upload to load local currencies, transaction currencies, and quantities in extension version and support delta mode
    • Adjusted Post Group Journal Entry app to load local currencies, transaction currencies, and quantities into extension versions, delta calculation at document level
  • SAP Group Reporting Data Collection
    • Collection in Forms of data with local currencies, transaction currencies, and quantities on extension version, delta calculation
    • Data Mapping import data in local currencies, transaction currencies, and quantities on extension version, delta calculation
  • Balance Carryforward and Core functions
    • Balance Carryforward (from an extension version) can post to a destination version and with a deviating sub item
    • Core functions now read local currencies, transaction currencies, and quantities in extension versions and write delta changes
  • Analytics
    • Aggregation of new measures (local currencies, transaction currencies, and quantities) in the version stack
    • Consider the group structure of the extension version to select data


More information

For more information on restatements and simulations, you can refer to the following:


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