Creating and Configuring the Equity Elimination

Choose between the full range of functions of the app (Capital consolidation and reclassification to non-controlling interests) or whether you only want to reclassify to non-controlling interests.

If you select the full range of functions, you can also perform a measurement according to the equity method. When this option is activated, the Equity method step is shown.

If you want to perform the automatic migration to the app for equity elimination on the CFO Solution Platform, the following options are available to you here:

Reclassify goodwill and negative consolidation differences

Activate the check box to reclassify the goodwill and negative consolidation differences to the dimension elements and accounts required by the business logic of the equity elimination in the Lucanet CFO Solution Platform.

Merge balances of non-controlling interests posted by origin account If you have presented the non-controlling interests by origin account in the previous version of the app, you need to activate this checkbox to reclassify the balances of the non-controlling interests to the default account for non-controlling interests:.

This option is always available regardless of the selectedscope of functions.

Accounting standard to be applied:

Consolidation areasand/or units of the selected group the consolidation is to be performed for

By default, all consolidation areas and units within the group are included in the consolidation.

If you only want to include certain consolidation groups and units in the consolidation, activate the Individual selection check box and select one of the following options:

In the table, select individual consolidation areas and/or consolidation units to be considered in the consolidation.

In the table, select the consolidation areas and/or consolidation units that are to be excluded from consolidation.

Adjustment level group containing all adjustment levels for data imports and adjustment postings which need to be considered during consolidation.

Please ensure that this adjustment level group contains the adjustment level for proportioning.

Adjustment level for consolidation postings to be used for postings

Adjustment level for the proportioning

The adjustment level must be contained in the adjustment level group selected under Basis.

Adjustment level group that contains all adjustment levels of the adjustment level group Basis and the adjustment level Target.

Account to which rounding differences are posted

The balance account(s) or item(s) for shares and investments to be included in the equity elimination. All accounts and items must belong to the same transaction type category.

Transaction types to be used for additions to and disposals from historical costs.

These transaction types will be used in the context of IC share acquisitions and equity method measurements.

The transaction types selected for historical cost must belong to the same transaction type category as the accounts and/or items selected for shares and investments.

Equity accounts or items to be included in the equity elimination. All accounts and items must belong to the same transaction type category.

Activate the option to include corporate actions in the consolidation process for fully consolidated subsidiaries.

If you activate the option, additionally choose the transaction types for capital increase and capital reduction as well as a P&L account to which the difference from corporate action is to be posted.

The selected transaction types for the corporate actions must belong to the same transaction type category as the selected accounts and/or items for equity.

Under Recognize differentials, specify how differences from changes to the ownership interests without loss of control should be recognized. Depending on the underlying accounting standard, you have the following options:

With this option, differentials will be recognized as goodwill or negative goodwill in the event of an increase in ownership interest or as gain or loss from deconsolidation in the event of a reduction in ownership interest.

With this option, differentials are recognized in retained earnings under equity, regardless of whether there is an increase or decrease in ownership interest.

When choosing the option In equity, please specify an account to which the Retained earnings are to be posted.

Select the profit and loss account for the recognition of the gain or loss from deconsolidation.

This account is required during the consolidation process if an investorloses control of a previously fully- or proportionally consolidated subsidiary due to a reduction in the ownership interest.

Balance sheet item under which accounts for goodwill are to be created.

If necessary, activate the option Amortize goodwill on a straight-line basis, and also select a transaction type that is to be used for the amortization postings.

Specify how negative consolidation differences are to be recognized.

Recognize in the P&L

Activate this option to recognize negative consolidation differences in the profit and loss statement and select the corresponding target account to be used by the app.

Recognize in the balance sheet

Activate this option to recognize negative consolidation differences in the balance sheet and select the target balance sheet item under which the account(s) for negative consolidation differences are to be created.

Reverse negative consolidation difference on a straight-line basis

When recoginition in the balance sheet is chosen, activate this option if negative consolidation differences are to be reversed and select a transaction type to be used for the postings.

Specify whether the differential from equity elimination is to be presented in the currency of the consolidation area or in the currency of the consolidation unit.

If the presentation in the currency of the consolidation unit is chosen, you should also select the balance sheet item under which the technical account(s) for the reclassification of the differentials are to be created or have already been created with the correct attributes.

Specify whether the differential attributable to indirect non-controlling interests is to be recognized.

Specify how differentials relating to indirect non-controlling interests that arise during the initial consolidation of subsidiaries or the consolidation of an increase in shares in subsidiaries is to be recognized.

The following options are available depending on the underlying accounting standard:

Non-controlling interests

Balance sheet item under which the account or accounts for non-controlling interests are to be created or have already been created with the correct attributes

Changes in non-controlling interests

Transaction type to be used for recognizing changes in non-controlling interests following increases or decreases in ownership interests without loss of control

Net income/loss in equity

Balance sheet item or account to be used as the basis for reclassification of the net income/lossto non-controlling interests

Transaction type Transaction type to be used as a basis for the reclassification of the net income/loss to non-controlling interests

Profit or loss attributable to non-controlling interests

Target account in the P&L for posting the reclassification of the net income/loss to non-controlling interests

Accounts or items whose values are to be used as a calculation basis for the continuous attribution of the currency translation differences to non-controlling interests

For the Reconciliation between opening and closing carrying amounts of the investment, select a subledger item with period type Balance with carry forward from previous period under which accounts used for the measurement of associates according to the equity method should be created.

Notes:

Select the transaction type to be used to recognize increases in carrying amounts of investments in associates.

Please note that the selected transaction type must belong to the same transaction type category as the item chosen for the reconciliation between the opening and carrying amounts.

Select the transaction type to be used to recognize decreases in carrying amounts of investments in associates.

Please note that the selected transaction type must belong to the same transaction type category as the item chosen for the reconciliation between the opening and carrying amounts.

Activate the option to allocate a difference arising from initial measurement of an associate according to the equity method to the included proportionate hidden reserves and liabilities as well as to the remaining proportionate goodwill or negative consolidation difference.

If the option is activated, select the balance sheet item or account used for the disclosure of the revaluation surplus. This item or account will serve as the basis for the differential allocation to hidden reserves and liabilities.

Description

Review the selected base account and transaction type within the Non-controlling interests step for the continuous attribution of income to non-controlling interests.

This account and transaction type will serve as a basis for the subsequent measurement of associates according to the equity method as well. The app will calculate the share of the associate's profit and loss in each period based on the values found on this combination of account and transaction type.

Choose the target P&L account to be used by the app to present the share of the income or loss from associates in a separate line item in the consolidated statement of profit or loss.

Please note that the differentiation between the share of the associate's income and loss is solely used to recognize the net result below the correct line item in the profit or loss statement. However, these accounts are not used for a separate disclosure of the associate's income and losses as this is not required by the legislation.

Review the selected base accounts and items within the Non-controlling interests step for the continuous attribution of currency translation differences to non-controlling interests.

These accounts and items will serve as the basis for the subsequent measurement of associates according to the equity method as well.

Activate the option to recognize the share of the associate’s other comprehensive income separately.

If this option is activated , select the balance sheet item or account and the transaction type to be used as the basis for calculating the proportionate other comprehensive income within the subsequent measurement of an associate according to the equity method.

The app will calculate the share of the associate's other comprehensive income in each period based on the values found on this combination of account/item and transaction type.

Please note that the availability of the option depends on the previously selected accounting standard.

Description

Select the account to be used by the app for changes in ownership interests with loss of significant influence to recognize the gain or loss from disposal of associates.

Select the transaction type for disposal of accumulated depreciation and amortization on the equity carrying amount.

Specify the following for the Subsequent measurement according to the equity method:

Specify the following for the Changes in ownership interests with loss of significant influence: