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Object documentation Method 

Definition

See the general section on consolidation Structure linkmethods.

Use

The distinguishing feature of methods for consolidation of investments (C/I), as opposed to methods of other consolidation tasks, is that the C/I methods are not assigned to the tasks. Instead they are assigned directly to the consolidation units (see the section on accounting techniques). Unlike methods of other task categories, methods for consolidation of investments cannot be performed directly.

Structure

Tab Page General

·  Accounting Technique: A C/I method is designated to a specific accounting technique. Therefore, if you want to consolidate consolidation units that have different accounting techniques, you need at least one method for each accounting technique.

In a C/I method, you can only use those accounting techniques that you activated in System Utilization.

·  Acquisitions: The system can calculate acquisitions with direct shares or with group shares. You can use these two variants for the treatment of acquisitions during the activities first consolidation, step acquisition and increase in indirect investment.

¡  Acquisitions with direct shares: Minority interests in equity change in relation to the increase of direct shares of the upper unit in the investee unit. Minority interests in the investment are not displayed. Goodwill amortization calculates minority interests based on the group shares of the upper units.

¡  Acquisitions with group shares: Minority interests in equity change in relation to the increase of group shares in the investee unit. Minority interests in the investment are displayed. Goodwill amortization does not calculate minority interests.

The results for the two variants differ only in multi-level investment hierarchies. In both cases, minority interests in equity are calculated based on group shares in the investee unit during subsequent consolidation.

·  Carry Goodwill in Local Currency: Set this indicator, if you want to carry goodwill in the local currency of the investee units that have this C/I method assigned to them. However, this is only possible if you already activated the Goodwill in Local Currency function for the consolidation area, and the C/I method does not use the equity method.

·  Post Goodwill to Investee Unit: Set this indicator, if you want to post goodwill to the investee units that have this C/I method assigned to them. If you selected Goodwill in Local Currency, the system always sets this indicator automatically.

Note

The following settings are available only if you defined the individual goodwill treatments as Per Method or With Exceptions, rather than Global, in System Utilization.

·  Goodwill, Negative Goodwill: You can specify how goodwill or negative goodwill should be treated. You can choose one of the following options:

¡  Extraordinary amortization

¡  Ordinary amortization

¡  Direct elimination

¡  Periodic reduction

You can activate separate exceptions in this method for each goodwill treatment: If you set the Exception indicator for a given goodwill treatment, or you selected Per Method for this goodwill treatment in System Utilization then you can define additional details on the Goodwill and Negative Goodwill tab pages, depending on the settings on this tab page.

If you selected Goodwill in Local Currency for this method, you can only choose between Extraordinary Amortization and Ordinary Amortization.

·  Negative Stockholders' Equity: Exceptions: If you set this indicator, you can overwrite the settings for Negative Stockholders' Equity, Global for individual methods.

Goodwill and Negative Goodwill Tab Pages

If you activated exceptions for a goodwill treatment in a method, you can overwrite the settings made under Goodwill Global for this goodwill treatment on these tab pages.

 

 

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