POWNMIN is a keyword used in the consolidation method table. You use it for the method corresponding to the EQUITY method. The settings in this table are used by the Ownership Calculation routine to compute the percentages of control, the ultimate percentages of ownership, and to automatically assign the percentages of consolidation and the consolidation methods for legal consolidation. Using POWNMIN, the percentage of consolidation that is assigned for the EQUITY company corresponds to the percentage used in a staged consolidation
POWNMIN Calculation
POWNMIN = POWN + Sum of (Percent Minority of Entity Owners * Direct Percentage of Ownership in the Entity)
Where:
Percent Minority = Percent Consolidation – Percent Ownership
Entity Owners means any entity (within the descendants of the current parent) owning shares of the entity processed.
Direct Percentage of Ownership in the Entity can be retrieved from the account [shares%owned].
Example:
B is owned by A: 80%
C is owned by A: 70%
D is owned by B: 20%
D is owned by C: 20%
The Parent GROUP has A, B, C, and D as dependents (A is the holding company). The system calculates percent ownership as follows:
A: 100%
B: 80%
C: 70%
D: 30%
Suppose the Percent Consolidation of D (from the consolidation method table) is POWNMIN.
In this case, the POWNMIN calculation process would be:
Consolidation of D into B using direct ownership percentage: 20%
Consolidation of D into C using direct ownership percentage: 20%
Consolidation of B and C into A using their respective percentages: (80% and 70%)
It is calculated as follows:
Entity D’s Percent consolidation = 30% + (100% - 80%) * 20% + (100% - 70%) * 20% = 40%
Entity D is consolidated using a total percentage of 40%.
The POWNMIN calculation also could require iterations. The system stops when two subsequent iterations have the same result.
When the subholdings B and C are consolidated into A, some minority interests corresponding to 10% are calculated on the Equity from Entity D.
POWN Calculation
However, if the consolidation is done using a flat hierarchy, the process typically uses the ultimate percentage of ownership (POWN) as percentage of consolidation for the Equity company. In this case, the percentage of consolidation for D into the Group would be 30%. No minority interests would be calculated on the Equity from Entity D.
In summary:
Using POWN, the percentage of consolidation assigned to Entity D would be 30% (ultimate percentage of ownership)
Using POWNMIN, the percentage of consolidation assigned to Entity D would be 40% (percentage of consolidation)
For information on managing ownership, see the Oracle Hyperion Financial Management User's Guide.