Consolidation of segments
You can perform consolidation of debts for entity-intercompany relations and segment-intersegment relations.
A segment can be, for example, a division, profit center, region, or product line.
To show segment-intersegment relations, you can use Segment 1, Segment 2, and Segment 3.
Segment consolidation is a by-product of total consolidation. In addition to showing group results, you must show consolidated segments. For example, show consolidated divisions if you use the Segment dimension to present divisions.
Each segment-intersegment relation requires an entity-intercompany relation. One entity-intercompany relation can have several segment-intersegment relations or one segment-intersegment relation can have several entity-intercompany relations.
This table shows an example of when segments and intersegments are different:
| Entity | Intercompany | Segment 1 | Intersegment 1 | Account | |
|---|---|---|---|---|---|
| Trade receivables | Trade payables | ||||
| Genesis Cars | Genesis Finance | Automotive | Services | 320,050.00 | 460,000.00 |
| Genesis Finance | Genesis Cars | Services | Automotive | 460,000.00 | 320,050.00 |
This table shows an example of when segments and intersegments are the same:
| Entity | Intercompany | Segment 1 | Intersegment 1 | Account | |
|---|---|---|---|---|---|
| Trade receivables | Trade payables | ||||
| Genesis Cars | Genesis Finance | Services | Services | 10,000.00 | 0.00 |
| Genesis Finance | Genesis Cars | Services | Services | 0.00 | 10,000.00 |
If you consolidate segments as part of the consolidation of debts, the logic differentiates between intrasegment and intersegment eliminations.
If the segment and intersegment are the same, then an intrasegment elimination is performed.
If the segment and intersegment are different, an intersegment journal is run.
Segments and intersegments can be the same within segment-intersegment relations. Entities and intercompanies must differ within entity-intercompany relations.
Because of the structure of the DSTAGE dimension, a journal entry to an intrasegment affects only an individual consolidated segment.
You can use the Group Hierarchical Segmentation Analysis report to analyze individual consolidated segments. To view this report, select and specify the context data for the report.
Financial Consolidation is based on hierarchical segmentation. Breaking down, for example, a value of 100 separately into a business and region is not sufficient. You must also consider the connection between the business and region. Therefore, you can break down the value of 100 as in this example:
- 60: Automotive/Austria
- 10: Automotive/Sweden
- 20: Trading/Austria
- 10: Trading/Sweden
The differentiation is important only if more than one segment is used.