Running Consolidation of Investments for Subsequent Consolidation of the Equity Method

Objective

After completing this lesson, you will be able to Run and validate consolidation of investments for subsequent consolidation of the equity method.

Consolidation of Investments Result for Subsequent Consolidation of the Equity Method

When task 2100 is run, Sequence number 600 allocates the group share for the current period net income. 35% of the net income (-6,624) is posted to 171000 (Non-Controlling Interest Retained Earnings) with an offset to FS item 711000 (Non-Controlling Interest Net Income).

  • Debit 171000 2.318,4
  • Credit 711000 -2.318,4

The Triggering Amount is the current period net income value (-6,624) for CA00.

Since the previous entry includes both balance sheet and income statement FS items, the system automatically posts offsetting entries to keep the income statement and balance sheet in balance:

  • Debit 799000 2,318,4.
  • Credit 317000 -2.318,4.

Run and Validate Consolidation of Investments for Subsequent Consolidation of the Equity Method

Business Scenario

At ABC Corporation, you are testing the rule-based consolidation of investments for the equity method. You have configured the rule to allocate the group share of the subsidiary's earnings for the current period.

In this exercise, you’ll run the Investment / Equity Elimination task and view the results in the log.

What skills will you develop in this practice exercise?

  • Run the Investment / Equity Elimination task.
  • Evaluate the log entries.

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