Specifying Parent Entity Characteristics

Use Parent Attributes to define parent-level parameters: blocking account groups, elimination groups, or whether to use account inputs or outputs in calculating data in non-consolidated Time Periods.

  To specify parent entity characteristics:

  1. Open a consolidation structure.

  2. Select the parent entity.

  3. Select Consolidation, then Entity Characteristics, and then Parent Attributes.

  4. Optional:Blocking Accounts—Under Blocking Groups, select account groups to block from consolidation.

    You select items under Blocking Groups to block accounts, so those accounts are not summed up from the child entities into the consolidated parent. You can enter values manually into the consolidated parent for those accounts.

    • Select Residual Value to manually enter consolidated residual values.

      • Selected—You can manually input Residual Value in the consolidated parent, and Consolidator blocks the Residual Valuation Calculation accounts set in the consolidated parent.

      • Deselected—Consolidator calculates the consolidated Residual Value by adding the Residual Valuation Calculation accounts for all child entities. Only the Liquidation method is available for the Shareholder Value and Dividend Discount models and the Perpetuity method for the Economic Profit model. See Calculating the Tax Effect of Operating Losses and Valuations with Consolidation Structures.

    • Select Cost of Capital to manually enter consolidated cost of capital values.

      • Selected—You can manually input Cost of Capital in the consolidated parent, and Consolidator blocks the Cost of Capital accounts set in the consolidated parent

        Perform an action to enter data manually in the cost of capital accounts of the consolidated parent:

        • Cost of Capital (v5000) and Long-Term Cost of Capital (v5005)

        • Cost of Equity (v5300) and Long-Term Cost of Equity (v5305)

        • Economic Profit RROC (v5700) and Long-Term Required Return (v5705)

      • Deselected— Consolidator calculates the consolidated Cost of Capital from combinations of the cost of capital accounts in the child nodes—see Valuations with Consolidation Structures.

    • Select Tax Rates to manually enter tax rates in the consolidated parent.

      • Selected—You can manually input Tax Rates in the consolidated parent, and Consolidator blocks the Tax and Valuation accounts set in the consolidated parent

        Enter data manually in the tax rate accounts of the consolidated parent:

        • Trial Provision for Income Taxes (v1610)

        • Deferred Provision for Income Taxes (v1660)

        • Interest Tax Shield (v3220)

        • Tax Rate on Non-Operating Profit (v3230)

        • Temporary Differences (v3120)

      • Deselected— Consolidator sums the tax rate accounts from the child nodes Valuations with Consolidation Structures.

    • Select Interest Rates to manually enter interest rates in the consolidated parent.

      • Selected—You can manually input interest rates in the consolidated parent, and Consolidator blocks the interest rate accounts set in the consolidated parent

        Enter data manually in the interest rate accounts of the consolidated parent:

        • Marketable Securities (v2010.05)

        • Interest on Excess Marketable Securities (v2015.05)

        • Interest on Current Portion of Long-Term Debt (v2510.05)

        • Interest on Notes Payable (v2520.05)

        • Non-cash Interest on Long-Term Debt: Scheduled (v2660.03)

        • Interest on Long-Term Debt

        • Scheduled (v2660.51)

        • Interest on Excess Debt (v2690.05)

      • Deselected— Consolidator calculates consolidated interest rates by summing the interest rate accounts from all child nodes—see Calculating the Tax Effect of Operating Losses and Valuations with Consolidation Structures:

    • Select Common Dividends to manually enter Common Dividends (v1880) in the consolidated parent.

    • Under User Defined Blocking Groups, select account groups to block from consolidation.

  5. Optional:Eliminating Accounts—Under Elimination Groups, select accounts to eliminate from consolidation.

    Eliminated accounts are set to zero in the consolidation parent during processing. For example, an intercompany transaction modeled in a child entity may not be needed in the consolidation, so it can be eliminated.

    Accounts must be in account group to be eliminated. Elimination can be based on account groups in the consolidation parent or business unit entities.

    • UnderEliminate Based On, select the source for elimination groups:

      • Current Entity

        Eliminates accounts using account groups in the consolidation parent.

      • Business Unit

        Eliminates accounts using account groups in the child entities.

        Note:

        Accounts that are both eliminated and blocked are eliminated.

    • Under User Defined Elimination Groups, select account groups to eliminate from consolidation.

  6. Optional: Under For time periods in which data will not be consolidated in the current entity, define how data is used in non-consolidated time periods.

    Data in non-consolidated time periods must be handled differently. For example, if you are consolidating these accounts:

    Account

    Input

    Output

    2004 Budgeted Sales

    11%

    1889

    2005 Plan (growth rate)

    9%

    2058

    Because sales are down, you revise 2004 Budgeted Sales, so you must recalculate 2005 Plan:

    Account

    Input

    Output

    2004 Budgeted Sales

    5%

    1787

    2005 Plan (growth rate)

    ?

    ?

    For time periods in which data will not be consolidated in the current entity determines how these fields recalculate:

    • Don't Preserve Data—Blocks data from non-consolidated time periods, resulting in zero values. For example:

      Table 4. Don’t Preserve Data

      Account

      Input

      Output

      2004 Budgeted Sales

      5%

      1787

      2005 Plan (growth rate)

      0

      0

    • Preserve Inputs—Data recalculates using Input cells, for example:

      Table 5. Preserve Inputs

      Account

      Input

      Output

      2004 Budgeted Sales

      5%

      1787

      2005 Plan (growth rate)

      9%

      1947

      Note:

      Preserve Input does not work on these input accounts because Consolidator treats them as calculated accounts: v5000 Cost of Capital (Kw), v5005 Long-Term Cost of Capital (%), v5300 Cost of Equity (Ke), v5305 Long-Term Cost of Equity (%), v5700 Economic Profit PROC (%), and v5705 Long-Term Required Return (%). To preserve the values of these accounts in the consolidation, block these accounts.

    • Preserve Outputs—Data recalculates using Output cells, for example:

      Table 6. Preserve Outputs

      Account

      Input

      Output

      2004 Budgeted Sales

      5%

      1787

      2005 Plan (growth rate)

      15.2%

      2058

  7. Click Apply or Apply to All Scenarios.

    Note:

    While on Parent Attributes, this saves parent attributes only.