Equity Method

[Former Member]

How do you config the Equity method in BCS for a joint venture holding company? Thanks

[Former Member · Accepted solution]

Usually, for JVs a proprtional consolidation method is configured. Please clarify.

[Former Member · Accepted solution]

i understand there is a Equity and Purchase method we have to config; i am not sure how we set this up? is this called prop' consol? if so how do we config pls? thanks

[Former Member · Accepted solution]

i understand there is a Equity and Purchase method we have to config; i am not sure how we set this up? is this called prop' consol? if so how do we config pls? thanks

[Former Member · Accepted solution]

Purchase & Equity methods are the standard tools in SEM-BCS. But in case of JV,s AFAIK, it's absolutely improper to use them.

Proportional consolidation requires using of reclasses. There are rather lot threads regarding it in this forum. The last one was just recently. Please use search!

[dan_sullivan · Accepted solution]

Eugene,

FYI for USA GAAP, proportional consolidations are not permitted. Only the equity or purchase method are applicable for USA GAAP.

[Former Member · Accepted solution]

Dan,

You are right. Very much depends on the legislation. Though, even Canadian GAAP allows the prop. consolidation. I'm not talking about IAS.

[Former Member · Accepted solution]

Hello,

IFRS allow Equity and Propotional Methods for JVs.

Mila Ignatova

[Former Member · Accepted solution]

thanks all; just to make it clear what does the UK allow : equity or prop cons (reclassification) in BCS or does it not matter?

thanks

[dan_sullivan]

For automated equity method acounting (not proportional) it is necessary to correctly configure consolidation of investments (hint: execute COI check setting program to determine any inconsistencies).

Once COI is configured it is necessary in the master data to assign the equity method to those cons unit where it is to be applied. These master data settings are time dependent and should be assigned accordingly.