The Group Structure of Consolidation Group America
In this lesson, let's check the results for consolidation group America where the associated consolidation unit CAN00 - Canada is consolidated into group America with the equity method. This is due to an ownership percentage of 35 % of investor USA00 - United States in investee CAN00 - Canada.
Consolidation of Investment Method 20 - Equity Method (Direct Shares)
After executing the 2101 - Consolidation of Investments (Activity-Based) task, the system posts positive goodwill to investor USA00 - United States.
In this business case, assign Consolidation method 20 - Equity method (Direct Shares) to consolidation unit CAN00 in the America consolidation group. We use the Direct Elimination setting for positive goodwill.
Data Reference for Consolidation of Investments Results
Let's look at the local close data of the USA00 - United States in Group Currency EUR. This way, we can easily follow the calculation of the elimination results.
The investment of EUR 270 of the investor USA00 - United States posts to the 172100 - Investments in subs. JV and associates, GV FS item. This is important to know for the following calculation.
Local Close Data of CAN00 - Canada in Group Currency EUR
For the following calculation, note the following equity FS items of the associated investee CAN00 - Canada:311000 - Issued Capital, 316000 - Retained Earnings (prior year), 317000 - Net Income (Retained Earnings Current Year) and 799000 - Net Income/Loss P&L.
Executing Task 2101 - Consolidation of Investments (Activity-Based) for Consolidation Group AMER
Use the2101 Activity-based Consolidation of Investments (C/I) task to calculate the first and subsequent consolidation in the consolidation monitor.
Note
The task will only be executed as a Test run, since we will run other goodwill scenarios in the following units and check the relevant goodwill postings.Consolidation Group AMER: CAN00
First Consolidation
The video below explains the derivation of the elimination postings for the first consolidation for consolidation unit CAN00 - Canada in consolidation group America.
Anthony's Summary: In this video, we covered for consolidation unit CAN00 - Canada how to calculate goodwill, and how the elimination postings are calculated from a business point of view.
Consolidation Group AMER: CAN00 - First Consolidation Task Log
This image refers to the first consolidation section of the task log for consolidation unit CAN00 - Canada. The task log contains investment, equity, and differential information which is the goodwill information.
The Document information in the task log details the elimination posting record we set up for the first consolidation from a debit-to-credit perspective.
Subsequent Consolidation
On the first of December 2025, an investor bought Consolidation unit CAN00. Canada then generated profit for December. This profit generation occurs since, in the Group Structure settings, we did not select First Consolidation at the End of the Period.
Subsequent Consolidation Task Log
The task log of the subsequent consolidation shows the internal part of the net income of consolidation unit CAN00 - Canada, the Elimination Posting Record, and the Closing P&L and Earnings Effect in the Balance Sheet from a debit-to-credit perspective.
Manual Activation of Goodwill
After executing the2101 - Consolidation of Investments (Activity-Based) task, you must manually post the activation of goodwill using the Post Group Journal Entries app. The figure below explains how to set up such a posting.
As a result, the system posts EUR 135,25 to the asset Financial Statement item 163100 - Goodwill. This posting activates the goodwill.