Consolidation of Investment Task Query -1

[Former Member]

Dear Experts,

I have a critical doubt

I have created Cons. Group and Cons Unit as follows

Main Cons Grp

Sub Cons Group1

Cons Unit 1 (Parent Unit) 20% hold on Cons unit 2 (specified in accounting technique as Parent unit)

Cons Unit2 (Subsidiary of Cons Unit 1)

Sub Cons Group 2

Cons Unit 3 (Parent Unit) 1000% hold on Cons unit 4 (specified in accounting technique as Parent unit)

Cons Unit 4 (Subsidiary of Cons Unit 3)

Kindly tell me

1) This kind of Hirerchy will allow me to do COnsolidation of Investment with Minority Interest Calculation)

Or

2) How do I Investment consolidation in the above scenario?

(If you all can help with details)

Regards

Ritesh M

[Former Member · Accepted solution]

Ritesh,

Hierarchies in SEM-BCS may have different structure, depending on share of ownership and your purpose.

Your hierarchy:

>

>           Sub Cons Group1
> 
>                             Cons Unit 1   (Parent Unit) 20% hold on Cons unit 2 (specified in accounting technique as Parent unit)
>                             Cons Unit2    (Subsidiary of Cons Unit 1)
> 
>           Sub Cons Group 2
> 
>                             Cons Unit 3   (Parent Unit) 1000% hold on Cons unit 4 (specified in accounting technique as Parent unit)
>                             Cons Unit 4    (Subsidiary of Cons Unit 3)

Answering to your questions is impossible because:

1. 20% ownership usually means not a subsidiary, but an associate company, that is another accounting method.

2. Ownership in 1000% is impossible.

[Former Member · Accepted solution]

Ok, I must correct it then

Sub Cons Group1

Cons Unit 1 (Parent Unit) 20% hold on Associate Cons unit 2 (specified in accounting technique as Parent unit)

Cons Unit2 (Subsidiary of Cons Unit 1)

Sub Cons Group 2

Cons Unit 3 (Parent Unit) 100% hold on Cons unit 4 (specified in accounting technique as Parent unit)

Cons Unit 4 (Subsidiary of Cons Unit 3)

1) Now Can I use Purchase method in the above scenario

2) This kind of Hirerchy will allow me to do COnsolidation of Investment with Minority Interest Calculation)

Or

3) How do I Investment consolidation in the above scenario?

Regards

Ritesh M

[dan_sullivan · Accepted solution]

1. Purchase method may be used, however in most cases where ownership is less than 50% the equity method is used. This is not a hard-and-fast rule as there are other factors to be considered.

2. Yes this hierarchy will permit COI.

3. Assign accounting techniques in the master data, configure COI, ensure AFD or totals has correct values for investment and equity, and execute COI task.