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Goodwill Automation in SAP® BusinessObjectsTM Financial Consolidation, Starter Kit for IFRS

Goodwill automation constitutes a recurring request from SAP® BusinessObjects™ Financial Consolidation customers and partners. Based on our discussions with our ecosystem SAP Enterprise Performance Management therefore focused on analyzing, developing, testing and finally releasing a new version of its starter kit for IFRS that now includes this feature.

The starter kit for IFRS is a configuration of SAP® BusinessObjectsTM Financial Consolidation – part of SAP BusinessObjects enterprise performance management (EPM) solutions – designed to perform, validate and publish a statutory consolidation in accordance with IFRS.

A working document is available to help Financial Consolidation 10.0 business end-users understand how the starter kit for IFRS has been enhanced to that end. The purpose of this blog is to provide you with a high-level summary of this document.

Firstly, this document summarizes IFRS requirements regarding goodwill. It refers to the standards (mainly IFRS3 and IAS28) currently in force and does not take into account the new standards on consolidation published by the IASB mid-2011. However, these changes are not expected to have many impacts on goodwill measurement or recognition.

In this first part, the main questions are:

  • In what cases should goodwill (or bargain purchase) be recognized?
  • How should goodwill be measured?
  • What accounting entries related to goodwill should be recognized during subsequent periods?

Secondly, this document presents how the accounting of goodwill was historically handled in the starter kit.

The last part is dedicated to the enhancements made to the starter kit, focusing on the functional scope (which event(s) will be covered by the automated goodwill calculation) and the overall calculation and configuration principles.

To consult the comprehensive document, please click here.

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