The Group Structure of Consolidation Group America
In this lesson, the test scenario refers to the direct write-off of negative goodwill of consolidation unit CAN00 - Canada in consolidation groups America and World.
We will use the equity method for this final scenario since the ownership percentage is 35%.
The first section of this lesson checks the results for consolidation unit CAN00 - Canada in consolidation group America. The second section focuses on the consolidation group World.
Using Consolidation of Investment Method 20 - Equity Method (Direct Shares)
Assign Consolidation Method 20 Equity method (Direct Shares) to consolidation unit CAN00 - Canada in the group structure of group America and World. Use the setting Direct Write-off for negative goodwill.
Data Reference for C/I Results
Local Close Data of USA00 - United States in Group Currency EUR
See the local close data of the investor, USA00 - United States, according to this final scenario.
The amount posted on the 172100 – Investments in subs. JV and associates, GV FS item is now EUR 72 in group currency
Local Close Data of CAN00 - Canada in Group Currency EUR
The local close data of investee CAN00 - Canada did not change in the final scenario.
Consolidation Group AMER: CAN00
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 from a business point of view.
In the Document section of the task log, you can check the elimination postings and the earnings effect. We previously set up the elimination postings and earnings effect for the first consolidation from a debit-to-credit perspective.
Subsequent Consolidation
The internal part of the 317000 - Retained Earnings Current Year FS item, which contains the profit of CAN00, belongs to consolidation group America.
Subsequent Consolidation Task Log
The task log of the subsequent consolidation shows the internal part of the net income of consolidation unit CAN00 - Canada as well as the Closing P& L & Earnings Effect in BS from a debit-to-credit perspective.
The Group Structure of Consolidation Group World
The second section of this lesson focuses on consolidation unit CAN00 - Canada in the consolidation group World.
Consolidation Group WORLD: 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 World as well as the minorities in goodwill.
Summary: In this video, we covered how to calculate goodwill, the minorities in goodwill and how the elimination postings are calculated from a business point of view.
Next to the elimination postings previously derived for consolidation group America, you must calculate the minorities in goodwill. The calculation is necessary since 80% of the goodwill belongs to the consolidation group World, and 20% belongs to minorities.
First Consolidation & Task Log
The figure above shows the elimination postings for the first consolidation previously derived from a debit-to-credit perspective.
Subsequent Consolidation
Next to the elimination postings previously received for consolidation group AMER, you must calculate the minorities of the 317000 - Retained Earnings Current Year FS Item. Then, post the calculation to the minorities in the balance sheet and the income statement. The posting of the calculation triggers the closing of the P&L and the earnings effect.
Subsequent Consolidation Task Log
The figure above lists the elimination postings of the subsequent consolidation and shows them from a debit-to-credit perspective.