Matrix consolidation and management views

Legal consolidation answers "what does the group own and earn?" by legal entity. Management wants a second answer: "what does each business earn?" across entities. Contoso manages by profit center: CMC-FLEET for fleet customers, CMC-AFTMKT for aftermarket, CMC-PARTS for the distribution business in 1810. A fleet sale may involve 1710 building the alternator and 1810 shipping it. Matrix consolidation lets Group Reporting eliminate intercompany business along consolidation units and along profit centers or segments, so both views come from one data set.

How the matrix works

Each reported line in ACDOCU carries the consolidation unit and, when the company code posts with profit centers and segments, those too, along with their partner values. Matrix consolidation uses hierarchies, maintained in Manage Global Hierarchies, to decide at report run time where an elimination belongs. An intercompany sale is eliminated at the lowest node of the hierarchy where both seller and buyer meet. Elimination members such as "profit center for elimination" appear as extra fields in the analysis apps. These views are derived when you run the report, not stored as separate postings.

The effect matters for sign-off. If 1710 sells to 1810 inside the fleet business, the sale disappears already at the CMC-FLEET node: fleet's figures are external figures. If Chicago assembly (CMC-AFTMKT) sells to Toledo distribution (CMC-PARTS), each profit center shows the sale in its own view, and it disappears only at the group node above them. Both are correct; the hierarchy decides which you see.

Prerequisites that come from the general ledger

• Every intercompany line needs partner profit center and partner segment as well as trading partner. Logistics postings usually derive them; manual journal entries often do not.
• Document splitting (sap-fin-302) must produce balanced profit centers, or the matrix view shows balance sheets that do not balance by profit center.
• Hierarchies must be released and valid for the period; a reorganization mid-year needs time-dependent hierarchies.
• Plant 1720 sales derive CMC-AFTMKT by design, so a Chicago-built unit sold to a fleet customer shows as aftermarket; check that management accepts this before testing the view.

Reading the views

Analysis happens in the Group Data Analysis apps, where you can switch between consolidation unit, profit center and segment hierarchies and filter by posting level. For segment reporting under US GAAP or IFRS, the segment view is the source of the disclosures, so its tests deserve the same care as the legal balance sheet. A good test compares the sum of all profit center views at the group node with the legal consolidated figures: they must be identical, because the matrix only reallocates where eliminations show.

Segment reporting deserves its own test cases. Contoso reports segments for fleet, aftermarket and distribution under US GAAP in ledger 0L; IFRS figures in ledger 2L feed a separate view if the group reports under IFRS too. Test that each segment's revenue includes only external sales and sales to other segments, that the inter-segment sales shown in the disclosure reconcile to the eliminations at the group node, and that a reorganization (a profit center moved between segments) takes effect from the right period.

What goes wrong in testing

Matrix views are where management will look first, so they generate the most defect reports, and many of them are expected results that nobody wrote down. Write the expected node for each sample intercompany pair in the test case before running it. A tester who knows that a 1710-to-1810 fleet sale should disappear inside CMC-FLEET can tell a defect from a design choice in seconds.