Valuations with Consolidation Structures

Performing valuations in a consolidated parent and in a child entity are similar. While most of the data comes from the child entities, some accounts may be manually entered in the consolidated parent, depending on the consolidation structure.

Cash flows from child entities are additive in full consolidation methods, unless you have selected to block accounts—see Rolling Up Consolidations. Other child entity accounts are also cumulative:

  • Market Value of Debt (v5.00.500)

  • Market Value of Other Obligations (v5.00.540)

  • Underfunded Pension Liabilities (v5.00.520)

  • Investment in Stocks and Bonds (v5.00.560)

  • Market Value of Other Liabilities (v5.00.700)

  • Market Value of Other Assets (v5.00.720)

  • Residual NOPAT Adjustment (v5.00.820)

If these accounts contain data at a consolidated level, but not in child entities, consider entering the data into one of the child entities. Or, enter the account data in child entities, to avoid changing files.

You can block the Cost of Capital account group and manually enter those accounts in the consolidated parent

See Specifying Parent Entity Characteristics.

Otherwise, the cost of capital is calculated as a weighted average of the child entities.