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Unit 4: Consolidations and Eliminations

Figure 191: Net Income Elimination Log

Key points:
● The current period retained earnings (317000) for FR## is –78.520 EUR.
● The group share of FR## is 75%. The non-controlling interest is therefore 25%.
● In sequence 070, there are two sets of entries for 19.630 EUR (.25 x 78.520 = 19.630 EUR)
- Balance Sheet:
■ Debit 317000 current year retained earnings.
■ Credit 321150 NCI Net Income.
- Income Statement:
■ Debit 792000 (Net Income-NCI).
■ Credit 799000 Net Income/Loss.
- The reclass method triggered the debit to 792000 and the credit to 321150.
- The IMG table: Specify Selected FS Items for Automatic Posting triggered the debit to
317000 and the credit to 799000.

Figure 192: Net Income Elimination Report for CG00E

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Lesson: Configuring the Rule Based Purchase Method

Key points for FR## Posting Level 30 Net Income Elimination:

● The group share of current year retained earnings (317000) has been reduced by 19.630
EUR.
● The NCI share of current year retained earnings (321150) has been increased by 19.630
EUR.

Prepare for Consolidation Group Changes

Prepare for Consolidation Group Changes - Key Points

● When a cons group is divested from the group, you can automate the accounting entries
by using the Preparation for Consolidation Group Changes (PCGC) and the Total
Divestiture tasks.
● Run preparation for consolidation group changes:
- Cons Monitor PCGC:
When a consolidation unit is divested, reported and standardized data must be
adjusted with posting level 02 (reported data) or 12 (standardizing entries) by running
this task.
Also, consolidated financial data must be adjusted and the elimination entries must be
reversed with posting level 22 (two-sided eliminating entries: consolidation group
changes) by running this task.
● Total Divestiture:
When a consolidation unit is divested from a consolidation group you can use this task to
adjust consolidated financial data.
After this data is adjusted, the financial statements contain only the data that arose during
the time the consolidation unit was part of the consolidation group.
● When you have a divestiture, follow these steps:
- Set the divestiture date in the Manage Group Structure apps.
- Configure the divestiture method or use the best practice content.
- Run the following tasks:
■ Data monitor: data collection, currency translation ...
■ Cons monitor: eliminations and inv/equity elim for example.
■ Cons monitor - PCGC task:
■ Reported and standardized data is adjusted.
■ Assets are credited with transaction type 998.
■ Liabilities and Owners Equity items are debited with transaction type 998.
■ Posting level 20 eliminations are being reversed in this step using transaction
type 998

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