HFM Traning HITATHI

[HFM TRAINING] [HFM TRAINING]

Pressure on Finance Departments

Pressure on Finance Departments

Consolidation

Consolidation Process

Consolidation Process



_{What is Financial Consolidation?What is Financial Consolidation?} 

_{Consolidation in financial accounting is a technique that summarizes a group of companies' financial statementsConsolidation in financial accounting is a technique that summarizes a group of companies' financial statements}

into one. This offers the benefit of ie!ing the !hole group's financial information together to see ho! all into one. This offers the benefit of ie!ing the !hole group's financial information together to see ho! all companies are doing combined.

companies are doing combined.



_{"ncreasingl#$ global organizations need to integrate data from multiple transactional s#stems$ transition to ne!"ncreasingl#$ global organizations need to integrate data from multiple transactional s#stems$ transition to ne!}

international financial reporting standards$ and improe their transparenc# and regulator# compliance international financial reporting standards$ and improe their transparenc# and regulator# compliance procedures.

procedures.



_{Companies use a ariet# of tools %spreadsheets$ emails$ piots and queries& to identif# and summarize allCompanies use a ariet# of tools %spreadsheets$ emails$ piots and queries& to identif# and summarize all}

business unit actiit# that interacting !ith other business units. business unit actiit# that interacting !ith other business units.

This can often mean thousands of transactions$ all of !hich must be identified$ reconciled and eliminated This can often mean thousands of transactions$ all of !hich must be identified$ reconciled and eliminated



_{(limination(limination}



_{"ntercompan# elimination refers to the process for remoal of transactions bet!een companies included in a"ntercompan# elimination refers to the process for remoal of transactions bet!een companies included in a}

group in the preparation of consolidated accounts. group in the preparation of consolidated accounts.



_{"ntercompan# transactions %sales$ serices$ transfers& must be eliminated in the parent financial statements"ntercompan# transactions %sales$ serices$ transfers& must be eliminated in the parent financial statements}

other!ise a compan# could be )double*counting+ actiit#. other!ise a compan# could be )double*counting+ actiit#.



Ho!eer$ the process inoles a lot of reporting and paper!or, for intercompan# relationships can be quiteHo!eer$ the process inoles a lot of reporting and paper!or, for intercompan# relationships can be quite complicated.

complicated.



Wat is H!perion Financial Mana"ement #

 _{/racle H#perion Financial Management %HFM& is a comprehensie$ Web*}

based application that deliers global financial consolidation$ reporting and anal#sis in a single$ highl# scalable soft!are solution.

 _{HFM utilizes toda#'s most adanced 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 5ctiit# <ogs =. :>7< Capabilities

. "ntercompan# (liminations



_{HFM is a finance*o!ned$ "T*supported s#stem that allo!s #our}

organization to quic,l# ma,e changes as conditions !arrant but

trac,s those changes to proide transparenc# and isibilit# for

auditabilit#.



_{While HFM is a !eb soft!are application$ it also has an add*in !ith}

Microsoft /ffice %called 3martie!& !hich allo!s users to forecast or

budget in Microsoft (9cel$ an enironment comfortable to most

Cant $e do te same in e%cel #

 _{/f course A..}

We can do same in e9cel but maintaining huge data is difficult.

 _{Wh# do !e use HFM for consolidation !hen there are other tools ?}

_{2ser friendl#}

_{Web based application}

_{for each tas, there is separate module.}

(9ample 0*

_Bournals

_{(limination %intercompan#&} _{Wor, flo! Management} _{/!nership Management}

Wat HFM $ill do #



_{"t !ill consolidate the set of data !hether actual$ budget$}

forecast



_{"t supports the multi 4556 reporting}



_{<ine item details.}



_{uic, month end close.}



_{(as# consolidation process.}



_{Bournal adDustments}



_{"ntercompan# eliminations.}



_{6rocess management.}



_{Currenc# translation.}



 _{5fter the consolidation reports can be generated at}

H!perion Financial Mana"ement &'er'ie$

-ata (ntr# Forms E 4rids Calculate Feature Bournals Consolidation 6rocess Management H#perion 7eports E 3mart ie!

HFM )o"in

HFM Client <ogin 0

3tart



 6rograms



 /racle (6M 3#stem



 Financial

Management

HFM Web <ogin 0

Http0EE3ererGame06ortGumberEWor,spaceE"nde9.Dsp

HFM 3hared 3erices 0

Application Pro*ile

 _{We hae to create application profile before creating an application in HFM .}  _{"n 5pplication profile three dimensions are coered .}

1. ear  8. 6eriod ;. ie!

 _{These are the predefined dimensions !e hae 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 hae to delete the e9isting application and}

create a ne! application profile .

 _{The e9tension of application profile is .per%profile& .}

 _{5pplication 0 We hae to create an application either from client or from}

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;}



_{(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 Teams C8 -epartments C; Gone C= Gone



_{Gote0 5l!a#s 5ccount dimension is associated !ith custom}

dimension !hich is a alid combination . "n case if !e !ont

associate custom dimensions !e !ill get inalid

combinationE"ntersection.



_{6/0 6oint of ie!$ "t is the combination for all dimensions in}

application !ith a alid intersection to ie! the data.



_{We hae to select each member from each dimension as a}

6/. "f !e !ant to use a member from an# if the dimension

%custom& !e hae to select as G/G(

+,cenario .

3et of data !here it can be actual or budget or

forecast.

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 <egal scenario can contain data calculated according to legal

4556 format and rules. ou can define multiple scenarios for an

application. ou use the Manage Metadata module on the -es,top

to define attributes for members of the 3cenario dimension$ such as

the default frequenc#$ the default ie!$ and zero data settings. ou

create the calendar that defines ho! !ee,s build into months$

months into quarters$ and so on$ independentl# from the 3cenario

dimension !hen #ou define an application profile.

/, 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

aailable 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

2,(ntit!

The (ntit# dimension represents the organizational structure of the compan#$ such as the management and legal reporting structures. (ntities can represent diisions$ 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# actiit#. 5ll relationships among indiidual 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

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 the

alue 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#.

5, Account.

The 5ccount dimension represents a hierarch# of natural

accounts. 5ccounts store financial data for entities and

scenarios in an application. (ach account has a t#pe$ such

as 7eenue or (9pense that defines it accounting behaior.

ou use the Manage Metadata module to define attributes

for members of the 5ccount dimension$ such as the

account t#pe$ the number of decimal places to displa#$ and

!hether the account is a calculated$ consolidated$ or

6, Intercompan!.

The "ntercompan# dimension represents all intercompan#

balances that e9ist for an account. This is a resered

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!

7, 4ie$.

The ie! dimension represents arious modes of calendar

intelligence$ 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 cumulatie alues for the

#ear or quarter are displa#ed.

8,,+/ , Custom Dimensions

Four custom dimensions are aailable 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 moement$ or t#pes of elimination.

For e9ample$ custom dimensions could include 6roduct <ine$

7egion$ Channel$ or Customers.

Creatin" Application Pro*iles

ou use application profiles for the follo!ing purposes0

 _{To define the languages aailable for entering descriptions}  _{To define the application calendar} 

Accessin" te Process Pad

ou can access the process pad from the H#perion Financial Management Windo!s des,top client.

De*inin" te Calendar 

H#perion Financial Management proides a fle9ible calendar0

 _{ou can completel# customize the base periods$ summar#}

periods$ start #ear$ and number of #ears.

 _{ou can use the standard$ custom$ or manual method to define}

the calendar.

• ou can edit the frequenc# labels

and descriptions$ !hich are displa#ed in the ie! dimension.

• ou can add frequencies !hich #ou set up later in the

(ditin" Periods

(ditin" Periods



 _{oou can edit peu can edit pe riod labels and add descriptions.riod labels and add descriptions.}



 _{(ach hierarch# leel corresponds to a (ach hierarch# leel corresponds to a frequenc#.frequenc#.}

 5dd multiple  5dd multiple periods. periods.  5dd  5dd sibling. sibling.  5dd  5dd child. child. 

Application Re9uirements

Application Re9uirements

ou should hae this information on hand before #ou create an ou should hae this information on hand before #ou create an application0

application0



 _{The name of the application serer cluster The name of the application serer cluster} 



 _{The label and description of tThe label and description of the applicationhe application}



ettin" :p Applications

ettin" :p Applications

ou can access the Create 5pplication tas, from the File menu. ou can access the Create 5pplication tas, from the File menu.

Access and (dit Metadata Files

Access and (dit Metadata Files

C

Crreeaatteeananddeeddiitt m

meettaaddaattaafifilleess..

Loa

Load d mmetetadaadattaa fi filleeiintntootthhee a apppplliiccatatiioonn.. 3elect the 3elect the metadata t#pe. metadata t#pe. 3earch for a 3earch for a member  member  Create a ne! Create a ne! file

file _{/pen a/pen a} file file 3elect a 3elect a member to edit member to edit from the list from the list

3ae changes 3ae changes

;uildin" Mem<er Hierarcies

Create the member hierarch#.

(dit member hierarchies.

(ditin" Groups o* Mem<ers

 5dd member 

-elete member 

Cut$ cop# or paste alidate members

ettin" :p (ntities

(ntities define the consolidation path for #our data.

(ntit! [None] Acti'it! Cali*ornia :nitedtates Geo"rapical Plant+ Westales Connecticut (astales (ast3ales and West3ales occur in alternate rollups. (ntit! [None] Acti'it! Geo"rapical aleser'ices Westales Manu*acturin" (astales (meaales (meaer'ices De'elopment

;e*ore addin" an entit!= !ou sould a'e tis in*ormation. • Te parent to $ic te entit!>s data rolls up

• Te currenc! in $ic data is input *or te entit!

• Weter ad?ustments trou" ?ournal sould <e allo$ed *or te entit!

• Te securit! class *or te entit!

• Weter te entit! can <e a partner in intercompan! transactions

• For statutor! applications= te oldin" compan! *or te entit! • I* te entit! as tan one parent= te de*ault parent

(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

Te ICP dimension includes all mem<ers o* te (ntit! dimension *or $ic te IsICP propert! is selected,

Addin" Currencies

 0ou must add a currenc! to te application *or eac de*ault currenc! assi"ned to an entit! in te (ntit! dimension,

 5dd or edit currencies.

ettin" :p Accounts

and Custom Dimensions

 _{Te Account dimension de*ines te cart o* accounts *or an application,}  _{Custom dimensions pro'ide additional detail *or accounts,}

 _{Ten prede*ined account t!pes pro'ide <uilt-in *inancial intelli"ence,}

Account T!pes

• 5sset • >alance

• <iabilities • >alance 7ecurring

• "ncome • Currenc#

• (9pense • -#namic

Assi"nin" Custom Mem<ers to Accounts

Custom1 members are not alid for Cash.

Closing>alance and its descendants in Custom= are alid for Cash.

Account Properties *or Intercompan!

Tese are te properties *or intercompan! accounts.

 _IsICP  _Plu"Acct

ettin" :p cenarios

 _{Te cenario dimension represents a set o* related data= suc as <ud"et= actual=}

or *orecast

 _{;e*ore !ou add a cenario dimension mem<er= !ou sould a'e tis in*ormation}

read!.

 _{Te *re9uenc! *or te scenario data}

 _{Te *re9uenc! *or intercompan! transaction data}  _{Te de*ault data 'ie$= periodic or !ear-to-date}

 _{Te de*ault data 'ie$ *or periods $it missin" data}

 _{Weter consolidation sould <e <ased on periodic or !ear-to-date 'alues}

 _{Weter te scenario $ill support process mana"ement and= i* so= te num<er}

o* re'ie$ le'els

 _{Weter accounts can use line-item detail in tis scenario}

 _{Weter can"es to data *or te scenario sould <e trac@ed in te data audit}

Con*i"urin" (%can"e Rate and Translation ettin"s

 _{:se te De*aultCurrenc! propert! to speci*! te de*ault currenc! *or te application,}

 _{:se te De*aultRateForFlo$Accounts and De*aultRateFor;alanceAccounts to}

speci*! te accounts used to store e%can"e rates *or *lo$ accounts and <alance accounts,

De*ault  P4A Metod

Te Periodic 4alue Add BP4A metod.

+, Translates ?ust te 0TD can"e *rom te pre'ious period at te current period>s e%can"e rate

/, Adds tis to te pre'ious mont translated <alance

-efault Method 65 Method

Ban Feb Ban Feb

(9change7ate 10; 108 10; 108

<ocalCurrenc#T- L I L I

TranslatedT- 1L 1L 1L 8LL

Current period

increaseEdecrease at current period rate plus prior period balance

I  L N 8

: 8

L O 1L

Consolidation ettin"s

 _{&r" <! Period}

 _{A""re"ation *or Intercompan! accounts}  _{Custom consolidation rules}

&r" <! Period

 _{(na<le &r" <! Period i* !ou need entit! structures tat 'ar! *rom period to}

period,

 _{&r" <! Period lets !ou mar@ entities as acti'e or inacti'e *or eac period,}

 _{(%ample. Plant/ $as sold in anuar!= so !ou mar@ it as inacti'e *rom Fe<ruar!}

*or$ard

Februar#

6lant1 4lobal3ales 6lant8

California Connecticut France "tal# 2nited 3tates (urope

4eographical

Banuar#

6lant1 4lobal3ales 6lant8

California Connecticut France "tal# 2nited 3tates (urope

Intercompan! A""re"ations

 _{Te Intercompan!A""re"ationWei"t propert! lets !ou speci*! a consolidation}

percenta"e *or intercompan! entities to teir parent ICP Top,

 _{A 'alue o* + represents +EE B*or e%ample= speci*! ,3 *or 3E,}

"C6 Top

6lant1

Additional Features

 _{Intercompan! Reportin"  "C6 enables to calculate the "ntercompan# Transactions.}  _{&$nersip 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 E}

entities based on the requirement.

 _{ecurit!  (as# securit# module connecting to the current 5ctie -irector# E <-56.}

 _{Tas@ Automation  6roides added adantage for automating an# tas,s li,e Consolidate$}

Common Member 6roperties

Tese properties are common to mem<ers in most dimensions.

 _Mem<er   Description  _{ecurit! Class}  _{De*ault Parent}  :serDe*ined+  _:serDe*ined/  _:serDe*ined1

Mem<er names cannot contain tese caracters.

• Period B ,  • Plus si"n B   • Minus si"n B -  • Asteris@ B   • las mar@ B   • Num<er si"n B   • ;races B JK  • Comma B =  • emicolon B L  • At si"n B  

ettin" Document Attacment )imits

 _{Document attacment siOe}

 _{Num<er o* attacments per user}  _{Num<er o* caracters *or cell te%t}

)oadin" and (%tractin" Metadata

)oad &ptions

 0ou can mer"e te metadata in te *ile $it te e%istin" application metadata or !ou can replace te e%istin" metadata

,

Data )oad Files

 _{)oad *iles are di'ided into sections $it an e%clamation point as te section delimiter,}  _{ections can <e in an! order in te *ile,}

 _{Te de*ault column order is cenario= 0ear= Period= 4ie$= (ntit!= 4alue= Account= ICP=} Custom+= Custom/= Custom1= Custom2,

 _{Fields *or te items $itin a section are delimited $it an! o* tese caracters.}

)oadin" Data

 _{2se the >ro!se button to identif# multiple}

data load files.

 _{The files are loaded in sequential order.}   _{5 6rogress !indo! sho!s the progress of}

Mer"e &ption

7esults of <oad Account 4alue 3ales L 7eturns 8L 6urchases ;L  5pplication Account 4alue 3ales 1LL 7eturns 8L 6urchases Go -ata

-ata <oad File

Account 4alue

3ales L

Replace &ption

7esults of <oad Account 4alue 3ales L 7eturns Go -ata 6urchases ;L  5pplication Account 4alue 3ales 1LL 7eturns 8L 6urchases Go -ata

-ata <oad File

Account 4alue

3ales L

Accumulate &ption

7esults of <oad Account 4alue 3ales 1L 7eturns 8L 6urchases ;L  5pplication Account 4alue 3ales 1LL 7eturns 8L 6urchases Go -ata

-ata <oad File

Account 4alue

3ales L

Accumulate Witin File &ption

 _{Merge !ith 5ccumulate !ithin File}

 _{7eplace !ith 5ccumulate !ithin File}

7esults of <oad Account 4alue 3ales 11L 7eturns 8L 6urchases Go -ata  5pplication Account 4alue 3ales 1LL 7eturns 8L 6urchases Go -ata

-ata <oad File

Account 4alue

3ales L

3ales @L

Merge !ith 5ccumulate !ithin File

Can"in" te Grid )a!out and Displa!

electin" Mem<ers *or Dimensions

Clic, to select members for ro!s and columns.

a'in" Data Grid ettin"s

6riate data grids are displa#ed in the

-ocuments list of the users !ho created them. Clic, the sae settings button.

ou can spread data from summar# periods to base periods.

preadin" Data

Clic, the submit data button.

(nter amount in summar# time period.

1 8

Addin" Cell Te%t

Addin" )ine-Item Detail

A<out Intercompan! Transactions

 5 transaction bet!een t!o entities in an organization is an intercompan# transaction.

(ast 3ales Customer  

West Factor#

3ale

4oods shipped from separate organization ; 1 8 "ntercompan# "noice %Transaction&

(limination Process

235 7ental7eenue0 L 7ental(9pense0 L California 7ental7eenue0 1LL 7ental(9pense0 L Connecticut 7ental7eenue0 L 7ental(9pense0 1LL 6lant1 7ental7eenue0 1LL 7ental(9pense0 L 3ales West (ast3ales 7ental7eenue0 L 7ental(9pense0 1LL  5dministration (ast Mar,eting (ast

Plu" Accounts

"ntercompan# 5ccounts Gon*"ntercompan# 5ccount

3ales * "ntercompan# 6urchases * "ntercompan# "nterco-iff6<

LL @LL *1LL

Intercompan! (liminations and te 4alue Dimension

ettin" :p (ntities *or Intercompan! Transactions

3pecifies !hether the entit# is displa#ed as a member in the "C6 dimension

3pecifies a securit# class for the entit# for the "C6 dimension

ettin" :p Accounts *or Intercompan! Data

The follo!ing properties need to be set for intercompan# accounts0

 _"s"C6  _6lug5cct

Consolidation Process

6rocesses0

 7un calculation

 _{6erform currenc# translations}   _{5ppl# o!nership percentages}

 _{(liminate intercompan# transactions}

23

Connecticut

Consolidation and te 4alue Dimension

(ntit# Currenc# stores the original input alue.

Contribution Total stores the alue that aggregates to the parent.

These members store the intermediar# alues used to derie Contribution Total.

A<out Consolidation Percenta"es

4eographical

2nited 3tates (urope

California Connecticut France "tal#

6lant 1 (ast3ales 6lant8

1LLP 1LLP 1LLP KLP LP JLP 3ample /rganization /!nership 3tructure

(nterin" Consolidation In*ormation

:sin" &$nersip Mana"ement

3#stem account for

consolidation percentage Clic, 3ae

4ie$in" te Pro"ress ;ar 

 _{2se the progress bar to ie! the status of the consolidation.}

 _{Clic,ing the red icon in the 3top Tas, column to stop the consolidation process$ if}

A<out Translatin" Data

23-(27

4eographical

(urope 6arent Currenc# N

23-(ntit# Currenc# N (27

23-Translatin" Data in Data Grids

(ntities !ith a currenc# different from the one sho!n in the 6/ bar sho! a status of T7 or T7 G- until the data is

translated.

3electing translate to translate data to the currenc# sho!ing in the 6/ bar.

(nterin" (%can"e Rates

(9change rate account

The custom dimensions contain s#stem*defined currenc# members. "n this e9ample$ Custom1 is the source currenc# and Custom8 is the destination currenc#.

A<out &r"aniOation <! Period

Children can be mar,ed as actie or inactie b# period.

Banuar# Februar# March

"nactie for Februar# "nactie for March

(urope France "tal# 6lant 8 (urope France "tal# 6lant 8 (urope France "tal# 6lant 8

ettin" :p &r"aniOation <! Period