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Does ownership management and multilevel entity hierarchy consolidates? (Doc ID 2560983.1)

Last updated on SEPTEMBER 19, 2019

Applies to:

Oracle Financial Consolidation and Close Cloud Service - Version 19.05.53 and later
Information in this document applies to any platform.

Goal

With following entity hierarchy the Div1 combined ownership for E2 is 80% and should be consolidated there with subsidiary method. E2 should be consolidated to P1 and P2 with equity method as it is owned at 40%.



Top
|_Div1
  |___P1
  | |__E1
  | |__E2 (40% Own, Equity Method, PCON=0)
  |___P2
  |__E3
  |__E2 (40% Own, Equity Method, PCON=0)



We built the entity hierarchy to FCCS ownership management and simulated the case, but E2 consolidation method change due to combined ownership was not correctly handled when consolidated to Div1. FCCS admin guide indicates that adjustments should be made in the Entity Elimination Adjustments Consolidation member.

Does anyone know if this should currently work as out of the box with ownership management and multilevel entity hierarchy?

Excerpt from FCCS admin guide: THIS IS NOT WORKING!

In an organization structure with shared entities, the aggregation of elimination entries
processed in relation to each of the branches in which the shared entity resides is not
always the result required when all instances of the shared entity are combined. For
example, an entity might be owned at 40% by one immediate parent and 40% by
another, with the Equity method being applied in both cases. The lower of the entity
and partner consolidation % is applied to the elimination. In this case, no eliminations
occur because the Consolidation % for the Equity method is 0%. When the two shared
entities consolidate into their first common parent however, the combined ownership is
80% and the Subsidiary method should be applied, with a Consolidation of 100%. An
adjustment is made at the first common parent at which the aggregated results of the
lower level eliminations are incorrect for the current consolidation method. This
adjustment is made in the Entity Elimination Adjustments Consolidation member of the
first common parent.

The tool do this step as an own functionality or do we have to do this?
 

Solution

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In this Document
Goal
Solution
References


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