In order to provide for advanced consolidations and eliminations, various parameters must be established for each entity in the Entity dimension, in relation to its parent(s). Multiple consolidation methods are established to facilitate consolidation and elimination rules, each with preset or configurable parameters including:
Minority (Non controlling) Interest %
A Control setting is also available to help determine the other settings for the methods.
The consolidation methods are then applied to the consolidating parent entity and its hierarchical descendants during the execution of consolidation, adjustment and elimination rules.
Tax Reporting provides several system methods:
Equity (Reserved for Future Use)
The Holding method is applied to the legal entity for which its immediate parent represents the consolidated results of that legal entity. The Holding method always applies an Ownership % of 100% and a Consolidation % of 100%. Control is Yes. There can be only one Holding method entity for each parent entity.
The Subsidiary method is applied to legal entities owned by the holding company and for which the holding company exercises control. The Ownership % of a Subsidiary company generally ranges from 50% to 100%. Control is Yes and the Consolidation % is therefore 100%. Minority (Non-controlling) Interest equals 100% minus the Ownership %.
If the company has a Percent Consolidated (PCON) of 100%. the children of TRCS_NIBT Adjusted account are calculated at PCON, and all other accounts are calculated at POwn (percentage ownership).
The Proportional method is applied to legal entities owned but not controlled by the holding company but requiring proportional consolidation. This generally applies to Joint Ventures. Control is No and the Consolidation % is equal to the Ownership %. All accounts are calculated at POwm.
Not Consolidated method
The Not Consolidated method is applied to legal entities owned by the holding company and for which the holding company exercises neither control nor significant influence. The Ownership % of a Not Consolidated company generally ranges from 0% to 20%. Control is No and the Consolidation % is therefore 0%. Minority (Non-controlling) Interest also equals 0%.
All accounts are calculated at POwn, but the Ownership Percentage should be set to zero. If Ownership Management is enabled, the following rules apply to all of these methods:
- Consolidated Descendants of TRCS_NIBTAdjusted at PCon
- Consolidates all other accounts at POwn
The Inactive method is reserved for future use.
The Discontinued method is reserved for future use when system consolidation rules are created for discontinued operations.
For any given Ownership %, the system assigns a default Consolidation method, based on the Ownership % ranges below.
The system methods comprising the 0% to 100% range are:
Not Consolidated = 0%
Proportional = 0% to 50%
Subsidiary - greater than 50% to 100%.
As an example, if you enter 35%, the Consolidation Method is automatically set to Proportional. If required, click Consolidation Method to select a different method.