Now that you have configured the rules for first consolidation, you need to add a rule for the subsequent consolidation. As previously mentioned, subsequent consolidation allocates the non-controlling interest of the subsidiary’s net income.
Rule 600 allocates the non-controlling interest for consolidation unit CA00’s net income to Investment at Equity. There is an offsetting entry to Share of Profit for Equity Subsidiaries.
- Debit FS item 171000 (Investment at Equity)
- Credit FS item 711000 (Share of Profit for Equity Subsidiaries)
In the Settings tab:
- Select Periodic reclassification to process the current period values.
- Select the periodic (9) Cons Frequency.
- Select Post to triggering unit (default).
- Select C/I Activity 02 (Subsequent Consolidation).
- Select Accounting Technique 4 (Equity Method).
The remaining tabs in rule 600 are configured as follows:
- The trigger selection object Z-ME-NET-INC picks the current year retained earnings (317000) of the subsidiary (CA00).
- The Source Item Role, S-A-INV-AT-EQUITY, is assigned to FS item 171000. Therefore, FS item 171000 is debited (assuming current year retained earnings are negative).
- The subitem for the debit posting is subitem 901 (Incoming Units).
- The Source Item Role, S-P-SHARE-EM, is assigned to FS item 711000. Therefore, FS item 711000 is credited.
- The subitem for the credit posting is functional area YB99 (Dummy functional area).
- The Z-COI-PERCENTAGE selection object accesses the ownership percentage of 35%. As a result, 35% of the current year retained earnings is posted.
