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Pressure on Finance Departments
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Consolidation At-a-Glance
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Consolidation Process
What is Financial Consolidation?
Consolidation in financial accounting is a technique that summarizes a group of companies' financial statementsinto one. This offers the benefit of ie!ing the !hole group's financial information together to see ho! all
companies are doing combined.
"ncreasingl#$ global organizations need to integrate data from multiple transactional s#stems$ transition to ne!
international financial reporting standards$ and improe their transparenc# and regulator# compliance
procedures.
Companies use a ariet# of tools %spreadsheets$ emails$ piots and queries& to identif# and summarize all
business unit actiit# that interacting !ith other business units.
This can often mean thousands of transactions$ all of !hich must be identified$ reconciled and eliminated
(limination
"ntercompan# elimination refers to the process for remoal of transactions bet!een companies included in agroup in the preparation of consolidated accounts.
"ntercompan# transactions %sales$ serices$ transfers& must be eliminated in the parent financial statements
other!ise a compan# could be )double*counting+ actiit#.
Ho!eer$ the process inoles a lot of reporting and paper!or, for intercompan# relationships can be quite
complicated.
-ata must be reie!ed$ reconciled and approed before process is complete.
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Wat is H!perion Financial Mana"ement #
/racle H#perion Financial Management %HFM& is a comprehensie$ Web*
based application that deliers global financial consolidation$ reportingand anal#sis in a single$ highl# scalable soft!are solution.
HFM utilizes toda#'s most adanced technolog#$ #et is built to be o!ned
and maintained b# the enterprise's finance team.
HFM has financial controls$ !or,flo! and best*practices built into the
platform to support0
1. 23 4556 and "F73 7eporting
8. 3arbanes /9le# %3/:& Compliance;. 5udit Trails and 5ctiit# 7< Capabilities
. "ntercompan# (liminations
@. Foreign (9change Translations
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HFM is a finance*o!ned$ "T*supported s#stem that allo!s #our
organization to quic,l# ma,e changes as conditions !arrant buttrac,s those changes to proide transparenc# and isibilit# for
auditabilit#.
While HFM is a !eb soft!are application$ it also has an add*in !ith
Microsoft /ffice %called 3martie!& !hich allo!s users to forecast orbudget in Microsoft (9cel$ an enironment comfortable to most
finance users.
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Wat HFM $ill do #
"t !ill consolidate the set of data !hether actual$ budget$
forecast "t supports the multi 4556 reporting
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HFM Arcitecture
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H!perion Financial Mana"ement &'er'ie$
-ata (ntr# Forms E4rids
Calculate
Feature
Bournals
Consolidation
6rocess ManagementH#perion 7eports E
3mart ie!
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H!perion Financial Mana"ement Dimensions
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(%panded Dimensionalit!
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HFM )o"in
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HFM Client
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Application Pro*ile
We hae to create application profile before creating an application in HFM .
"n 5pplication profile three dimensions are coered .
1. ear
8. 6eriod
;. ie!
These are the predefined dimensions !e hae application profile concept in classic
method and once in a life time of the proDect crate application profile .
"n case if #ou !ant to modif# !e hae to delete the e9isting application and
create a ne! application profile .
The e9tension of application profile is .per%profile& .
5pplication 0 We hae to create an application either from client or from
!or,space .
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Dimensions
"n HFM $ There are 18 dimensions as follo!s
1 . 3cenario
8. ear
;. 6eriod
=. ie! . (ntit#
@. 5ccount
I. "C6%"nter compan# partner&
J. alue
K. Custom1
1L. Custom8
11. Custom;
18. Custom=
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(9cept custom dimensions rest are the standard dimensions.
Custom -imensions 0 The -imensions !hich are al!a#s
associated !ith account dimensions for additional information.
(90 5Ec 3ales
5ccount*3ales
C1
TeamsC8
-epartments C;
GoneC=
Gone
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Gote0 5l!a#s 5ccount dimension is associated !ith custom
dimension !hich is a alid combination . "n case if !e !ontassociate custom dimensions !e !ill get inalid
combinationE"ntersection.
6/0 6oint of ie!$ "t is the combination for all dimensions inapplication !ith a alid intersection to ie! the data.
We hae to select each member from each dimension as a
6/. "f !e !ant to use a member from an# if the dimension
%custom& !e hae to select as G/G(
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+,cenario . 3et of data !here it can be actual or budget orforecast.
The 3cenario dimension represents a set of data$ such as >udget$
5ctual$ or Forecast. For e9ample$ the 5ctual scenario can contain
data from a general ledger$ reflecting past and current business
operations. The >udget scenario can contain data that reflects the
targeted business operations. The Forecast scenario t#picall#contains data that corresponds to predictions for upcoming periods.
5
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/, 0ear.
The ear dimension represents the fiscal or calendar #ear for data.5n application can contain data for more than one #ear. ou specif# a
#ear range !hen #ou create the application and then select a #ear
from the ear dimension to process data.
1, Period.
The 6eriod dimension represents time periods$ such as quarters and
months. "t contains time periods and frequencies b# displa#ing the
time periods in a hierarch#. For e9ample$ if the 5ctual scenario
maintains data on a monthl# basis$ generall# 18 periods of data are
aailable for this scenario in a #ear. H#perion Financial Management
supports #ears$ months$ and !ee,s for the period dimension. "t does
not support da#s for the dimension. ou edit periods and frequencies
in the application profile
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2,(ntit!
The (ntit# dimension represents the organizational structure of the compan#$
such as the management and legal reporting structures. (ntities can representdiisions$ subsidiaries$ plants$ regions$ countries$ legal entities$ business units$
departments$ or organizational unit. ou can define unlimited entities.
The (ntit# dimension is the consolidation dimension of the s#stem. Hierarchies
in the (ntit# dimension reflect arious consolidated ie!s of the data. arious
hierarchies can correspond to geographic consolidation$ legal consolidation$ or
consolidation b# actiit#. 5ll relationships among indiidual components of the
members that e9ist in an organization are stored and maintained in this
dimension. (ntities in an organization are dependent$ base$ or parent entities.
-ependent entities are o!ned b# other entities in the organization. >ase entities
are at the bottom of the organization structure and do not o!n other entities.
6arent entities contain one or more dependents that report directl# to them.
ou use the Manage Metadata module on the -es,top to define attributes for
members of the (ntit# dimension$ such as the default currenc# and securit#
class$ and to specif# !hether the entit# allo!s adDustments and stores
intercompan# detail.
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3, 4alue.
The alue dimension represents the different t#pes of
alues stored in #our application$ and can include the input
currenc#$ parent currenc#$ adDustments$ and consolidation
detail such as proportion$ elimination$ and contribution
detail. For e9ample$ the (ntit# Currenc# member stores thealue for an entit# in its local currenc#. The 6arent
Currenc# member stores the alue for an entit# translated
the to currenc# of its parent entit#.
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5, Account.
The 5ccount dimension represents a hierarch# of natural
accounts. 5ccounts store financial data for entities andscenarios in an application. (ach account has a t#pe$ such
as 7eenue or (9pense that defines it accounting behaior.
ou use the Manage Metadata module to define attributes
for members of the 5ccount dimension$ such as theaccount t#pe$ the number of decimal places to displa#$ and
!hether the account is a calculated$ consolidated$ or
intercompan# partner account.
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6, Intercompan!.
The "ntercompan# dimension represents all intercompan#balances that e9ist for an account. This is a resered
dimension that is used in combination !ith the 5ccount
dimension and a custom dimension. H#perion Financial
Management can trac, and eliminate intercompan#transaction details across accounts and entities. ou can
also run intercompan# matching reports to ie!
intercompan# transactions.
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7, 4ie$.
The ie! dimension represents arious modes of calendarintelligence$ for e9ample$ 6eriodic$ ear*to*-ate$ and uarter*
to*-ate frequencies. "f #ou set the ie! to 6eriodic$ the
alues for each month are displa#ed. "f #ou set the ie! to
ear*to*-ate or uarter*to*-ate$ the cumulatie alues for the#ear or quarter are displa#ed.
8,,+/ , Custom Dimensions
Four custom dimensions are aailable for anal#sis of detailed
data. ou can use custom dimensions to store additional
details associated !ith accounts$ such as products$ mar,ets$
channels$ balance sheet moement$ or t#pes of elimination.
For e9ample$ custom dimensions could include 6roduct
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Creatin" Application Pro*iles
ou use application profiles for the follo!ing purposes0
To define the languages aailable for entering descriptions
To define the application calendar
To define the application frequencies
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Accessin" te Process Pad
ou can access the process pad from the H#perion Financial Management Windo!s des,top client.
ou can enter up to 1L languages.
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(ditin" Periods
ou can edit period labels and add descriptions.
(ach hierarch# leel corresponds to a frequenc#.
5dd multiple
periods.
5dd
sibling.
5dd
child.
3ae application profiles either locall# or on the application seer !ith the e9tension .per.
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Application Re9uirements
ou should hae this information on hand before #ou create an
application0
The name of the application serer cluster
The label and description of the application
The file name and path of the application profile %.per file&
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ettin" :p Applications
ou can access the Create 5pplication tas, from the File menu.
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Access and (dit Metadata Files
Create and editmetadata files.
Load metadatafile into theapplication.
3elect the
metadata t#pe.
3earch for a
member
Create a ne!
file /pen a
file
3elect a
member to edit
from the list
3ae changes
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;uildin" Mem
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(ditin" Groups o* Mem
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ettin" :p (ntities
(ntities define the consolidation path for #our data.
(ntit!
[None]
Acti'it!
Cali*ornia
:nitedtates
Geo"rapical
Plant+
Westales
Connecticut
(astales
(ast3ales and
West3ales occur
in alternate rollups.
(ntit!
[None]
Acti'it!
Geo"rapical
aleser'ices
Westales
Manu*acturin"
(astales
(meaales
(meaer'ices
De'elopment
;e*ore addin" an entit!= !ou sould a'e tis in*ormation. Te parent to $ic te entit!>s data rolls up Te currenc! in $ic data is input *or te entit! Weter ad?ustments trou" ?ournal sould
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(ntities and Intercompan! Partners
3pecifies !hether
the entit# displa#s
as a member in the
"C6 dimension
3pecifies a
securit#class for the
entit# for
intercompan#
transactions
California
6lant1
West 3ales
1LLL
Members of the "C6
dimension
Members of the (ntit#
dimension
"s"C6 member attribute
selected
6lant1
West 3ales
Te ICP dimension includes allmem
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Addin" Currencies
0ou must add a currenc! to te application *or eac de*ault currenc! assi"ned toan entit! in te (ntit! dimension,
5dd or edit
currencies.
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ettin" :p Accountsand Custom Dimensions
Te Account dimension de*ines te cart o* accounts *or an application, Custom dimensions pro'ide additional detail *or accounts,
Ten prede*ined account t!pes pro'ide
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Assi"nin" Custom Memalance and its
descendants in Custom=
are alid for Cash.
g | || HFM
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Account Properties *or Intercompan!
Tese are te properties *or intercompan! accounts.
IsICP
Plu"Acct
ICPTopMem
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Con*i"urin" (%can"e Rate and Translation ettin"s
:se te De*aultCurrenc! propert! to speci*! te de*ault currenc! *or te application,
:se te De*aultRateForFlo$Accounts and De*aultRateFor;alanceAccounts tospeci*! te accounts used to store e%can"e rates *or *lo$ accounts and
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De*ault P4A Metod
Te Periodic 4alue Add BP4A metod.
+, Translates ?ust te 0TD can"e *rom te pre'ious period at te current
period>s e%can"e rate
/, Adds tis to te pre'ious mont translated
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Consolidation ettin"s
&r"
A""re"ation *or Intercompan! accounts
Custom consolidation rules
g |
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&r"
(na
(%ample. Plant/ $as sold in anuar!= so !ou mar@ it as inacti'e *rom Fe
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Intercompan! A""re"ations
Te Intercompan!A""re"ationWei"t propert! lets !ou speci*! a consolidationpercenta"e *or intercompan! entities to teir parent ICP Top,
A 'alue o* + represents +EE B*or e%ample= speci*! ,3 *or 3E,
"C6 Top
6lant1
West 3ales
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Additional Features
Intercompan! Reportin" "C6 enables to calculate the "ntercompan# Transactions. &$nersip Mana"ement To distribute the calculation E consolidation percentage to the
immediate parent based on the pre*defined alue.
Rules For creating the business E custom defined calculation scripts for the accounts Eentities based on the requirement.
ecurit! (as# securit# module connecting to the current 5ctie -irector# E
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Common Member 6roperties
Tese properties are common to mem
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ettin" Document Attacment )imits
Document attacment siOe
Num
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)oadin" and (%tractin" Metadata
0ou access te )oad Metadata and (%tract Metadata tas@s *rom te ;ro$ser 4ie$
,
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)oad &ptions
0ou can mer"e te metadata in te *ile $it te e%istin" application metadata or
!ou can replace te e%istin" metadata,
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Data )oad Files
)oad *iles are di'ided into sections $it an e%clamation point as te section delimiter,
ections can
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)oadin" Data
2se the >ro!se button to identif# multipledata load files.
The files are loaded in sequential order. 5 6rogress !indo! sho!s the progress ofeach load.
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Mer"e &ption
7esults of
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Replace &ption
7esults of
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Accumulate &ption
7esults of
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Can"in" te Grid )a!out and Displa!
Clic, the grid settings button.
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electin" Mem
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a'in" Data Grid ettin"s
6riate data grids are displa#ed in the
-ocuments list of the users !ho created them.
Clic, the sae settings button.
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Fillin" Multiple Cells
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ou can spread data from summar# periods to base periods.
preadin" Data
Clic, the submit data button.
(nter amountin summar#
time period.
1
8
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Addin" Cell Te%t
-efault length limitation is JLLL.
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Addin" )ine-Item Detail
5dds a ne! ro!
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A
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(limination Process
235
7ental7eenue0 L
7ental(9pense0 L
California7ental7eenue0 1LL
7ental(9pense0 L
Connecticut7ental7eenue0 L
7ental(9pense0 1LL
6lant1
7ental7eenue0 1LL
7ental(9pense0 L
3ales West
(ast3ales
7ental7eenue0 L
7ental(9pense0 1LL
5dministration
(ast
Mar,eting
(ast
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Plu" Accounts
"ntercompan# 5ccounts Gon*"ntercompan# 5ccount
3ales * "ntercompan# 6urchases * "ntercompan# "nterco-iff6