Consolidation adjustments

"Consolidation adjustments" document

Use the Consolidation adjustments document to calculate and record consolidation adjustments under the full acquisition method, the equity method, and change in equity shares in a subsidiary without loss of control in a report instance of analytical trial balance under IFRS of the eliminating company.

Before you use the document, create the Reporting period management document to select the scenario, period, and regulation for preparing reports.

Then click Fill in to calculate adjustments.

Consolidation adjustments are calculated automatically based on the investment flow document data (Investment inflow and Investment outflow). The application analyzes equity share changes in the consolidation perimeter and calculates the amounts of changes in net assets, goodwill, non-controlling shares, and other change indicators.

If effective share is not calculated automatically, but is entered manually in the version of regulation for preparing reports, adjustments are calculated based on the regulation version.

To translate the consolidated financial statements into the presentation currency (presentation currency):

Record the translational exchange rate difference resulting from the repetition of entries of the previous periods for elimination of investment in a subsidiary.

To eliminate investment in a subsidiary and recognize goodwill at the subsidiary purchase date:

Recognize goodwill at the date of control acquisition.
Record non-controlling share in equity at the date of control acquisition.
Eliminate investment in a subsidiary in correspondence with its capital items at the date of control acquisition.

To eliminate investment in a subsidiary and recognize goodwill on subsequent dates:

Record non-controlling share in equity in the financial result and other comprehensive income of a subsidiary as of the reporting date.
Record the shareholder effect and non-controlling share in equity from a change in the subsidiary equity shares in correspondence with the inflowed/outflowed investment for the investment elimination as of the transaction date.
Recognize subsidiary goodwill impairment as of the reporting date.

To record the investor's share in net assets of associates and joint ventures:

Repeat adjustments for the recognition of non-controlling share in equity, goodwill, elimination of investments and capital items of the subsidiary balance sheet that were made in the previous periods and are not subject to the usual algorithm for repeating adjustments of the previous periods.
Calculate and record an exchange rate difference resulting from the repetition in the following entries for the investment elimination, in a currency other than the presentation currency.
Record the investor's share in the financial result and other comprehensive income of associates and joint ventures as of the reporting date.
Record the investment impairment in associates and joint ventures as of the reporting date.

All amounts in the document are recorded in the presentation currency. You can convert investments and net assets from the functional currency to the presentation currency at the exchange rate as of the date of investment inflow or outflow.

Consolidation adjustments are generated as of the reporting date, and their amounts are translated into the presentation currency at the exchange rate as of the reporting date for "Statement of financial position" items. For "Profit and loss statement" items, they are translated at the average rate.

In the document, fill the header attributes:

Eliminating company. Company within the consolidation perimeter whose analytical trial balance will record consolidation adjustments.
Report period. Period for which you need to submit consolidated financial statements.

Click Fill in to automatically fill the document table based on the posted investment inflow and outflow documents. Each event of the ownership company is recorded line by line: all share inflows and outflows for the period.

The Date of previous share change/Period start column records the date of the last equity share change or the period start date for the ownership company if there was no share change in the current reporting period.

The Share change date/Reporting date column records the current date of the equity share change or the reporting date for the ownership company if there was no share change in the current reporting period.

These dates are required when calculating amounts for entries to record non-controlling shares in equity or investor shares in the financial result of the subsidiary, associates, or joint ventures when the shares have changed as of the change dates or reporting date since the last change date or the period start date.

The Relation to group before share change column displays the company status in the perimeter before the equity share acquisition or withdrawal. The Relation to group after share change column displays the company status in the perimeter after this event.

According to this status, the application determines the required consolidation method. For subsidiaries, select the acquisition method. For associates and joint ventures, select the equity method.

The Reporting period investments column contains amounts of the transferred or received compensation for the acquired or withdrawn shares of the perimeter companies.

If a company was included in the perimeter before the reporting period start and there was no change in its equity shares for the current reporting period, only the following adjustments will be recorded in the document table for this company: the non-controlling share in the financial result and the impairment of goodwill or the investor's share in net assets of associates and joint ventures.

To repeat all entries made before the reporting date, use the Repeat entries of previous periods document.

The remaining columns of the document table are also calculated automatically based on data automatically filled or entered manually at the bottom of the document, not based on data from investment flow documents.

To do this, at the bottom of the document, on the Full acquisition method (displayed for subsidiaries) or Equity method (displayed for associates and joint ventures) tab, click Fill in to automatically fill the company net assets broken down by capital accounts based on the application data.

The NA account column displays the company capital accounts that have balance. The Net assets after share change/at the end of period column displays amounts by the company capital items at the time of the equity share change or at the end of the reporting period if there was no equity share change specified in the Report period field of the document header. The Net assets before share change/at the beginning of period column displays amounts by the company capital items at the time of the last change in equity shares or at the reporting period start if there was no change.

Capital items for the acquired company are determined based on the Class field filled for each account that identifies its location in the reporting form.

In the application, the Capital – BS CA/RE class is set for capital accounts. Based on this account class, all net asset items are automatically entered. These items are later included in AR/AP and entries. Net assets are filled according to a trial balance report instance.

Based on the available report instances of analytical trial balance under IFRS, fill these columns with data on capital items at the beginning and end of the reporting period if there was no change in the equity share for the subsidiary or associate during the reporting period.

On the dates of the equity share change, net assets can also be filled automatically but only if a report instance of analytical trial balance under IFRS is available for these dates. If the report instance is missing, the net assets remain empty.

Select Fill in NA as of the flow date by coefficient to automatically calculate net assets as of the equity share change date on a time-proportional basis by the coefficient: number of days since the reporting period start date / number of days in the reporting period.

You can also fill or refill empty net assets manually. Such lines will be highlighted in blue. If you do not refill net assets manually, the NA coefficient field will display a coefficient calculated to determine net assets at the equity share change date.

To calculate the net asset coefficient at the equity share change date, the application searches for a report instance of analytical trial balance under IFRS for the previous date before the transaction date and a report instance of analytical trial balance under IFRS for the date following it. Next, a proportional-time coefficient is determined for these two dates in relation to the transaction date and multiplied by each net asset item, thereby calculating the item flow for the period from the previous reporting date to the transaction date. This change is then added item by item to the net assets at the start date (the previous reporting date) to result in the net assets at the equity share change date.

To update the amount of net assets according to the accounting data, click Fill in NA by accounting data. This returns the originally filled net assets for this company. Manually entered data and data based on the coefficient are reset.

If the application does not generate report instances of analytical trial balance under IFRS for the company, manually fill all net assets for the required dates.

If the net assets are filled for all investment flow dates, the Change net assets for period field automatically calculates the change in capital items for the period from the last equity share change date / the period start date to the current equity share change date / the period end date.

The Result for NCI/Result for investor field calculates the amount to record in the entry of the share in the financial result and other comprehensive income of the non-controlling share in equity or an investor.

The system determines the change in account 5.5.00.84.01 “Retained profit/unrecovered loss of the reporting period” and allocates the result of the non-controlling share in equity or the result for the investor in this entry change for the share in the financial result of the non-controlling share in equity to account 5.8.00.84.02 "Non-controlling equity share for the reporting period"/6.8.00.99.01 "Share in profit/loss from investments in joint ventures"/6.8.00.99.02 "Share in profit/loss from investments in associates". The equity method also displays the Dividends declared to investor and Tax on dividends payable by investor columns. In these columns, manually enter the respective indicators as of the report date. These amounts are included in the calculation of the investor's result.

The result for the non-controlling share in equity / the result for the investor in changes in other capital accounts is credited to account 5.8.00.84.03 "Non-controlling share of the reporting period – other comprehensive income"/5.2.00.83.00 "Share in other comprehensive income from investments accounted for under the equity method". The equity method requires the investor's result to be recorded in other comprehensive income broken down by each changed equity item. To do this, group account 5.2.00.83.00 “Share in other comprehensive income from investments accounted for under the equity method” has subaccounts for each changed capital item. These subaccounts specified in the GL accounts of net assets of associates/joint ventures setting and corresponding to the changed capital item are inserted in the entry that records the investor's result.

To automatically fill all columns of the upper part of the document table, fill the lower table part for each line of the net assets of the acquired company. The Net assets after share change/at the end of period column records net assets as of the date of subsidiary control acquisition. Based on the net assets at the control acquisition date and the investment amounts specified in the Reporting period investments column, goodwill and non-controlling share in equity are automatically calculated. The calculation results are recorded in the Goodwill as of the date of obtaining control in the reporting period and Non-controlling share as of the date of taking control in the reporting period columns.

If equity shares are changed during the period, the Shareholder result from share change and Change NCI on share change columns automatically calculate amounts to record the respective entries based on the net assets as of the change date.

To record the impairment of goodwill/investment for associates/joint ventures, manually fill the Recoverable amount as of the reporting date field on the Impairment of goodwill/investments according to equity method tab at the bottom of the document. In this case, the Net assets as of the reporting date/Investments as of the reporting date and Goodwill as of the reporting date (under the acquisition method) fields are filled automatically based on the accounting data. The net assets for capital items are filled based on the account class with the total balance amount as of this date. Goodwill and investment under the equity method are filled with balance amounts based on the fixed accounts specified in "Set up 1C:Perform parameters".

The entry impairment result is recorded in the Impairment of goodwill/investments according to equity method column. If the recoverable amount is not filled, no impairment will be calculated.

The More actions tab at the top of the document displays a link to the transformational adjustment that generates the document entries.

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