Posting Goodwill Data

Objectives

After completing this lesson, you will be able to:

  • Manually post goodwill entries

Goodwill Entry for the Purchase Method

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

In rule-based investment consolidation, you manually compute and post goodwill. Given that a subsidiary often has multiple parent companies, we calculate goodwill based on the investment and the direct ownership percentage of each parent company. We cannot automate the goodwill posting in rule-based consolidation because the data records do not include the partner unit (parent).

After calculating goodwill, you post it manually with document type 10. In each line item, the consolidation unit is FR00 (the investee), and the partner unit is BE00 (the parent).

Goodwill is posted manually with document type 10. In each line item, the consolidation unit is FR00, and the partner unit is BE00 (the parent).

Note: Subitem 920 is used in the manual posting to prevent the reclassification rules from eliminating the goodwill (the rules exclude subitem 920).

  1. Debit Goodwill by 67,702.50.
  2. Credit Prior Years Retained Earnings by -67,702.50.

Post Goodwill for the Purchase Scenario

Business Scenario

At ABC Corporation you are using rule-based consolidations for your purchase method elimination. You have calculated the goodwill for BE00 and FR00 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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