The Group Structure of Consolidation Group America
Let's focus on the Equity Method scenario for extraordinary amortization of positive goodwilland check the elimination results after executing the 2101 - Cons. Of Invest. (Act.-Based) task. After that, execute an impairment posting for consolidation group America.
Using the Consolidation of Investment Method 22 - Equity Method (Direct Shares-ExtAm)
After executing the 2101 - Cons. Of Invest. (Act.-Based) task, the goodwill posted to investee CAN00 - Canada will be positive.
In our scenario, assign Consolidation method 22 - Equity method (Direct Shares-ExtAm) to consolidation unit CAN00 in the group structure of Group America. Use the Extraordinary amortization setting for positive goodwill.
Note
Selecting Exception and Extraordinary Amortization of positive goodwill overwrites the Goodwill settings in theDefine Global Goodwill Items transaction with the settings for goodwill in consolidation method 22 - Equity (Direct Shares -Ext. Am).
See which asset FS item to use as an asset goodwill FS item for the first consolidation and the impairment posting.
Acquisition Item - Role ID: S-A-INV-AT-EQUITY. This role is assigned to 171000 - Investments when using the equity method asset FS item. The goodwill amount calculated during the first consolidation writes to this FS item.
Accum. Amortization item and Amortization exp. Item - Role ID: S-A-INV-AT-EQUITY. This role is assigned to 171000 - Investments using the equity method asset FS item. This FS item will also be used when after an impairment posting, the reduction of goodwill is automatically posted.
Data Reference for C/I Results
Local Close Data of the United States (USA00) in Group Currency EUR
Let's use the local close data of consolidation unit USA00 in group currency EUR. We will use this data to follow the calculation of the elimination results.
For the following calculation, note the investment of EUR 270 of the investor USA00 - United States, posted to the 172100 - Investments in subs. JV and associates, GV FS item.
Local Close Data of Canada (CAN00) in Group Currency EUR
For the calculation, note the equity FS items of the associated investee CAN00 - Canada: 311000 - Issued Capital, 316000 - Retained Earnings Prior Year and 317000 - Net Income (the Retained Earnings Current Year FS item), as well as the 799000 - Net Income/Loss P&L FS item.
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.
Summary: In this video, we covered how to calculate goodwill, and how the elimination postings are calculated by a business point of view.
Due to the Extraordinary Amortization setting in the consolidation method, the positive goodwill automatically posts to the asset FS item 171000 - Invest at Equity.
First Consolidation Task Log
In the Document section of the task log, you can check the elimination postings 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 Period.
The internal part of the317000 - Retained Earnings Current Year FS item which contains the profit of CAN00 belongs to consolidation group America and triggers the Closing P&L & Earnings Effect in the Balance Sheet.
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.
Impairment Posting - Consolidation Group AMER
To trigger a debit posting to the 711000 - Share of EM P&L FS item, post the goodwill reduction manually on statistical FS item $GW_IMP.
As the offsetting item in the manual impairment posting, use the statistical dummy content FS item $000000OFF or your own statistical FS item. Use document type 36 for the impairment posting for the Extraordinary Amortization of positive goodwill scenario. According to the impairment test, post the goodwill reduction to statistical FS item$GW_IMP. $GW_IMP is the trigger FS item from which the calculations begin.
To complete the posting, assign activity type 03 - Amortization of Goodwill, consolidation unit CAN00, and partner unit USA00 to the G/L Line Item row, containing the posting for FS item $GW_IMP.
No activity type or partner unit is required for the $000000OFF offset FS item.
When the posting is saved (automatically), execute the 2101 - Cons. Of Invest (Act.-Based) task again.
Consolidation Group AMER: Amortization of Goodwill
Task Log Overview
After re-executing the 2101 - Cons. of Invest (Act.-Based) task, the protocol contains the same results of the first and subsequent consolidation as shown at the beginning of this lesson.
In addition, the task log contains the section Amortization of goodwill.
Posting Logic & Task Log
The figure above explains which postings are triggered by the statistical FS item$GW_IMP after executing the 2101 - Cons. of Invest (Act.-Based) task.
The reduction of goodwill leads to a debit posting in the P&L. This triggers the earnings effect.