Posting Goodwill Data for the Equity Method

Objectives

After completing this lesson, you will be able to:

  • Manually post goodwill entries

Goodwill Posting for the Equity Method

Robert’s colleague, John, knows that as an intermediate consolidation consultant, Robert will need to know how to manually post goodwill entries for equity subsidiaries. Let’s learn more about this below.

Goodwill: The difference between the purchase price and the fair market value of the investee's equity.

Goodwill is posted manually with document type 10. In each line item, the consolidation unit is CA00 (the investee), and the partner unit is US00 (the parent).

Note
Subitem 901 (Incoming Units) is posted to because the reclassification rules select records with subitem 901.
  1. Debit Goodwill by 82,344
  2. Credit Prior Years Retained Earnings -82,344

Post Goodwill for the Equity Method

Business Scenario

At ABC Corporation, you are using rule-based consolidations for your equity method elimination. You have calculated the goodwill for US00 and CA00 and you now need to book a manual group reporting journal entry.

What skills will you develop in this practice exercise?

Post a manual group journal for goodwill.

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