This series of seven blogs is dedicated to handling scope changes using “SAP® BusinessObjectsTM Planning and Consolidation 10.0, Version for SAP Netweaver Starter Kit for IFRS”. The objective is to illustrate in the BPC Starter kit for IFRS some of the most frequent scope changes.
Part #5: Step acquisition – this blog
Part #6: Loss of control while retaining an interest
Part #7: Internal merger between two subsidiaries
Each blog introduces a practical guide that deals with the following questions:
– What are the regulation requirements that applies to the business case
– How to handle the business case in the starter kit for IFRS
– What are the impacts on the financial statements
The business cases presented in these blogs are included in the set of data provided with BPC NW 10.0 Starter kit for IFRS. You can consult them in the database. Please, refer to the operating guide delivered along with the starter kit for further detail on the consolidation process.
These blogs have been written by members of the SAP EPM (Enterprise Performance Management) Starter Kits & Innovations team that develops starter kits on top of SAP financial consolidation products, Financial Consolidation (FC) and Business Planning and Consolidation (BPC). The starter kits are preconfigured contents created to deliver business logic, to speed-up the application deployment and to provide guidance to help maximize advantages of the product. The contents provided in the starter kits consist of reports, controls and rules for performing, validating and publishing a legal consolidation in accordance with IFRS. SAP starter kits for IFRS are provided to BPC/FC customers at no additional charge; they can be downloaded from SAP service market place at http://help.sap.com/.
Now to the fifth blog!
Presentation of the business case
Parent company P5 (USD) purchased a 40% interest in associate PS5 for
USD40 000. PS5 Fair value of net assets is USD80 000.
Goodwill calculation on the 40%:
PS5 Profit for the year = USD20 000
P5 acquired a further 35% equity interest for cash consideration of USD55 000.
PS5 fair value of net assets = USD110 000
– Y 2012 equity (USD80 000)
– Y 2013 profit (USD20 000)
– Y 2014 Revaluation (USD10 000)
PS5 fair value of the NCI 25% equity interests = USD30 000
PS5 previously held 40% equity interest fair value = USD50 000
P5 individual accounts in 2014:
PS5 individual accounts in 2014:
(reevaluation posted at consolidation level)
Calculation of the gain on change of consolidation method:
Calculation of the new goodwill:
Please click here to access the practical guide
Acknowledgements to Laetitia Lamoureux, Caroline Verrier and Jean-François Bouillon from the EPM SK&I team for their high contribution to the “Consolidation Practical guide”.
Your comments about the contents are very welcome. Let us know what you wish to write about.
International Financial Reporting Standards (IFRS)