This new series of seven blogs is dedicated to help deal with the most frequent consolidation M&A requirements when using “SAP® Financial Consolidation 10.0, Starter Kit for IFRS". A first series was published 10 2011 to help deal with those cases when using SAP® Planning and Consolidation 10.0, starter kit for IFRS, version for SAP NetWeaver. These papers demonstrate SAP’s supremacy in addressing customers’ most complex and frequent business requirements
Part #1: Acquisition of a subsidiary (full goodwill method)
Part #2: Loss of control without any retained interest
Part #3: Acquisition of further equity interests from Non Controlling Interests - this blog
Part #4: Partial disposal of an investment in a subsidiary while control is retained
Part #5: Step acquisition
Part #6: Loss of control while retaining an interest
Part #7: Internal merger between two subsidiaries
Each blog introduces a practical guide that deals with the following questions:
- What are the regulation requirements that applies to the business case
- How to handle the business case in the starter kit for IFRS
- What are the impacts on the financial statements
The business cases presented in these blogs are included in the set of data provided with FC 10.0 Starter kit for IFRS SP2. You can consult them in the database. Please, refer to the operating guide delivered along with the starter kit for further detail on the consolidation process.
These blogs have been written by members of the SAP Business Analytics EPM (Enterprise Performance Management) Starter Kits & Innovations team that develops starter kits on top of SAP financial consolidation products, Financial Consolidation (FC) and Business Planning and Consolidation (BPC). The starter kits are preconfigured contents created to deliver business logic, to speed-up the application deployment and to provide guidance to help maximize advantages of the product. The contents provided in the starter kits consist of reports, controls and rules for performing, validating and publishing a legal consolidation in accordance with IFRS. SAP starter kits for IFRS are provided to BPC/FC customers at no additional charge; they can be downloaded from SAP service market place at http://help.sap.com/.
Now to the third blog!
Presentation of the business case
Year 2019
Parent company P3 (USD) purchases a 75% interest in subsidiary S3 for USD90 000
S3 Fair value of the NCI (25% equity interests) is USD28 000
S3 Fair value of net assets is USD100 000
Goodwill is calculated with the full goodwill method = USD18 000 (15 000 attributable to P3 and 3 000 to third party) as follows:
Year 2020
S3 Profit for the year = USD20 000
Year 2021
P3 acquired the 25% equity interests held by NCI for USD35 000 at the beginning of 2021.
P3 individual accounts in 2021:
S3 individual accounts at 2021 opening:
Equity transaction effect:
Practical guide
Please click here to access the practical guide on Service Market Place (login required)
Acknowledgements to Jean-François Bouillon, Laetitia Lamoureux and Caroline Verrier from the EPM SK&I team for their high contribution to the "Consolidation Practical guide".
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