Goodwill Inheritance 

Use

You use goodwill inheritance to copy manual goodwill entries upwards in the hierarchy of consolidation groups – that is, from lower-level consolidation groups to higher-level consolidation groups.

Prerequisites

The prerequisites are listed in the section Manual Entry of Additional Financial Data.

Features

Postings at posting level 30 generally apply internal logic called delta logic. When delta logic is used, all documents and totals records that are posted at a lower level in the hierarchy of consolidation groups also apply to the higher levels of the hierarchy. At the higher levels, the system merely posts delta entries. The delta is the difference between (a) the (hypothetical) total document that would normally be posted for the given consolidation group if no lower-level groups existed, and (b) the (actual) documents posted for the lower-level groups.

In contrast to documents and totals records, InfoProviders have no delta logic for goodwill entries. In cases where consolidation of investments computes goodwill for an investee unit and its upper unit, and this pair of units belongs to two different consolidation groups that are located over each other in the hierarchy, the system writes two goodwill entries to the InfoProvider. The reason for this is that goodwill entries also contain data about the consolidation group. (This is not the case in investment or equity data.) In general, the system automatically creates a separate goodwill entry for each consolidation group involved.

However, there are two exceptions: extraordinary amortization of goodwill and manual goodwill entries. These only apply to the consolidation group in which the entry for extraordinary amortization or manual goodwill is created.

In many cases you want the goodwill entries you create or change to be identical in all of the consolidation groups involved. When you use goodwill inheritance, you only need to enter manual goodwill once.

Goodwill inheritance depends on how treatment for acquisitions is set: When group shares (as opposed to direct shares) are used to calculate acquisitions, it does not suffice to merely copy the goodwill entries from the lower-level consolidation groups to the higher-level groups. Instead, the goodwill entries must be adjusted to the group share of the upper unit in each individual consolidation group. The system accesses the investment data to obtain these group shares.

Activities

To perform goodwill inheritance, proceed as follows:

...

      1.      Launch the consolidation monitor.

      2.      In contrast to the additional financial data for investments, equity, and equity holdings adjustments, goodwill entries explicitly contain the consolidation group. This means that a goodwill entry is only valid in the one consolidation group it is associated with.

Therefore, execute (in update mode) the task for entering additional financial data for a specific consolidation group.

      3.      In the data entry overview screen, choose which additional financial data you want to enter (in this case, goodwill inheritance) by choosing the corresponding execution symbol.

      4.      On the User Restrictions for Task: <task> screen, specify the organizational units for which goodwill is to be inherited.

      5.      Also specify whether to overwrite any data that already exists in the higher-level consolidation groups.

      6.      Choose Execute.

The system lists all goodwill entries.

      7.      To save the new goodwill entries, choose Save. Otherwise, choose Cancel.