This new series of seven blogs is dedicated to help deal with the most frequent consolidation M&A requirements when using “SAP® Financial Consolidation 10.0, Starter Kit for IFRS”. A first series was published in 2011 to help deal with those cases when using SAP® Planning and Consolidation 10.0, starter kit for IFRS, version for SAP NetWeaver. These papers demonstrate SAP’s supremacy in addressing customers’ most complex and frequent business requirements.
Part #1: Acquisition of a subsidiary (full goodwill method)
Part #5: Step acquisition
Part #7: Internal merger between two subsidiaries– this blog
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 FC 10.0 Starter kit for IFRS SP3. 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 Business Analytics 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 last blog!
Presentation of the business case
P7 owns 100% interests of subsidiary S7 and 100% interest of subsidiary S71
A fair value adjustment has been accounted for in S71:
(USD6 000 – 33% deferred tax = USD4 000)
A goodwill of USD6 000 has been posted on S71
S71 net income = USD15 000
At the end of Year 2021, S71 is merged into S7
S7 increases its share capital with 2 000 shares (nominal value of USD10) to USD20 000
S7 accounts for a share premium of USD65 000 (= Total equity USD85 000 – increase in share capital USD20 000)
P7 individual accounts in 2021 (including intercompany accounts)
S71 individual accounts in 2021 (including intercompany accounts)
Detailed merger of S71 into S7:
S7 individual accounts in 2021 (including intercompany accounts)
Please click here to access the practical guide
Acknowledgements to Jean-François Bouillon and Caroline Verrier from the EPM SK&I team for their high contribution to this “Consolidation Practical guide”.
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