Consolidation - Purchase Method

[Former Member]

Hello Friends,

I am working on Purchase Method and in that scenario I am trying to generate the Goodwill/ Capital Reserve and Minority Interest.

In the scenario I have acquired the subsidiary in September and there is a calculation of Pre and Post Acquisition reserve.

Below example using in the system all the data is uploaded using the input schedule.

Pls.. find the image in attached word file.

France acquired 60% shares on 01.09.09 in Spain

Balance in General Reserve and Profit & Loss Account as on 01.09.2009 in S Ltd. Were Rs. 50,000 and Rs. 45,000/- resceptively.

I have completed the currency conversion and Consolidation of Investment and it runs error free and generate the entires but the calculations are not correct for Goodwill/ Capital Reserve and Minority Interest.

Pls.. find the image in attached word file.

If you can observe in the result the Goodwill and Minority Interest is not correctly calculated.

I have use the below rules to generate the GW and Minority Interest.

GW rule:

Pls.. find the image in attached word file.

MI rule

Pls.. find the image in attached word file.

I have attached the complete detailed scenario in word file. Please help me to understand were need to do the changes in RULEs and what exactly I need to use the logic to generate the correct GW/CR and MI.

Thanks and regards,

Rajesh. K

[Former Member]

Hi Rajesh,

The word file is loaded as xml file so it would be better if you share the screen shot in the thread itself.

Regards,

Kalyan.

[Former Member]

Hello Kalyan,

Thanks for your reply.

Please find below screenshot of Goodwill calculation and Capital Reserve (Not created any member as a Capital Reserve) pls.. guide.:

I don't understand how it eliminate the investment with equity and get calculate the goodwill and Capital Reserve.

The below screenshot will provide the picture of input the data.

In the below result I am not able to understand how it calculate the Rs.2,55,800.00 from were it calculate the value.

In the above screenshot Minority Interest is calculating correctly, but unable to understand how it calculating the GW or Capital Reserve.

Thanks and regards,

Rajesh. K.

[Former Member]

Hi Rajesh,

Capital reserve and goodwill automation will be very difficult to achieve using business rule, the reason being other information such as price per share, total number of shares etc., is required. The best option to record goodwill and capital reserve would be to pass journals after consolidation.

Regards,

Kalyan.