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Equity Holding Adjustment

Former Member
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In my project they want all the Equity Holding adjustment entries to happen ECC, but donot want the configuration for Equity holding adjustment either to be read from u2018totalsu2019 or AFD.

This is for all consolidation units using u2018Equity methodu2019. For nearly 100 CU.

Has some one experience such scenario. What is the consequence of this in consolidation? Please share your thoughts /experience.

Edited by: Gokul on Sep 7, 2008 2:39 AM

Accepted Solutions (1)

Accepted Solutions (1)

dan_sullivan
Active Contributor
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In this case they are only using purchase method. The only solution I know of for this is for the users to calculate entries offline and post in ECC. Then the data for these equity held companies need not be included in the BCS master data or data collection at all.

If the data is to be collected in BCS, for these companies, what would be the purpose, since none of the balances are to be included in the reporting?

I have used COI to calculate and post equity adjustments which were subsequently posted into ECC. The ECC data was reversed/eliminated in BCS via reclass to avoid duplication. In this case, COI was implemented and the entities are included in the master data.

Former Member
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1. The reason for requiring the manual entry for The 'netincome' calculation by investor company is because it is not straight forward share calculation.

It is not straight forward (x)% of holding for the period. it is bit complex due to frequent inflow of funds during month and 'days' are involved to arrive at NI share for the period.

In such a situation is it ideal to pass the netincome share calculation entries as manual 'Adjustment journal entry' in BCS or is it better to post in ECC.

2. If we pass the NI share entry as manual calculation, will the entry gets ignored at upper level where holding is higher % by parent.

For example there are 3 companies owned by group ABC.. A,B,C. companies

A hold 90 % in C and B hold 8% in C. B accounts for C by equity method.. but the holding % is fluid due to constant inflow of capital fund.

So when the consolidation is run at top level at ABC , will the 'Equity holding adjustment' entries manually entered at C's level be ignored and will the holding be accounted for 98% by purchase and 2% MI be calculated?

What is required to achive this?

3. For dividend income received from investee unit accounted by 'Equity' method, the current practise is to direct pass the entry in ECC Cash (dr)/ Investment (Cr) in ECC.

This way client feels there is no need to execute the COI functionality to update the investment value in BCS. Is it good practise.. what are the drawback in this..

dan_sullivan
Active Contributor
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1) it makes little difference whether the posting is made in ECC or BCS. The one possible advantage to using BCS is that there will be a unique document type and posting level so this may be eliminated as is the case with scenario mentioned in question 2.

2) It is expected the entry for B's 8% share of earnings/losses in C are posted on B's books and not C's. To avoid this being included at the higher level where the ownership is accounted for using purchase method, it is necessary for this to be eliminated. This may be accomplished with elimination method/task or reclassification method/task with posting level 20 document. For this elimination to only be recognized at the higher level, the partner unit must be A and not C.

3) The only drawback of this approach is that the dividend entry must be eliminated as with the earnings/losses where purchase method is applicable. This may be accomplished using elimination method/task, but it will only work correctly with a partner unit of A.

Answers (1)

Answers (1)

Former Member
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Equity Holding adjustment might be read either from RFD or AFD. If they do not want both, then what???