Running Consolidation of Investments for Subsequent Consolidation of the Purchase Method

Objective

After completing this lesson, you will be able to Run and validate the investment / equity elimination task for subsequent consolidation of the purchase method.

Log Results for Subsequent Consolidation of the Purchase Method

When task 2100 is run, Sequence number 100 allocates the non-controlling interest for the current period net income.

25% of the net income (-8,520) is allocated to 321150 (Non-Controlling Interest Current Year Retained Earnings) with an offset to FS item 792000 (Non-Controlling Interest Net Income).

Note

FS item 321150’s description in delivered content is NCI - Net Income but is referred to as Non-Controlling Interest Current Year Retained Earnings.
  • Debit 792000 2.130
  • Credit 321150 -2.130

The Triggering Amount is the current year retained earnings value (-8.520) for FR00.

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

  • Debit 317000 Current Year Retained Earnings 2.130.
  • Credit 799000 Net Income / Loss -2.130.

Run Consolidation of Investments for Subsequent Consolidation of the Purchase Method

Business Scenario

At ABC Corporation, you need to allocate the non-controlling share of the purchase subsidiary’s net income and current year retained earnings to the consolidation group. You have configured the subsequent consolidation rule and now you need to run it.

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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