Last updated on SEPTEMBER 14, 2016
Applies to:PeopleSoft Enterprise FIN General Ledger - Version 9.2 and later
Information in this document applies to any platform.
9.2 on OT 8.53
Consolidation process miscalculates the parent investment offset for elimination entries created for subsidiaries with a minority interest outside of the organizational hierarchy.
There are 3 subs that are 99% owned by a single parent within the org chart, and 1% owned by non-controlling outside entities.
3 Subsidiary ownership sets have been defined for these.
Only one minority interest set is defined with different equity accounts defined as the "Subsidiary Equity" pool (SUB_EQUITY chartfield value set) and one asset account is defined as "Parent Investment" account (PARENT_INV chartfield value set).
Only one of the subs has any balances for a month (the other two subs, have zero period balances for all the above mentioned accounts).
When consolidation process was run, the balances of the equity accounts are eliminated correctly for SUB1, but balance for the parent investment account is eliminated 3 times.
If for Sub1, activity for a month is
- EQACC1 = ($4000) [credit equity]
- EQACC2 = ($1000)
And for Parent who has invested equivalent of 99% of Sub1's equity
- PARNTINV = $4950 [debit asset]
The consolidation generates following entries correctly
- EQACC1 = $4000 [debit equity]
- EQACC1 = $1000
- MINORINT = ($50) [calculate 1% minority interest]
But, since Sub2 and Sub3 have no activity, their ownership sets should not eliminate anything.
And the parent investment elimination should be
- PARNTINV = ($4950)
However in our results, we get the result as
- PARNTINV = ($14850)
- Out of balance credit = ($9900)
Essentially, the parent investment for Sub2 and Sub3 are being eliminated from the same amount $4950 3 times.
If deactivating one sub from the tree, it is noted the elimination amount was calculated twice.
When consolidation process was run, balance for the parent investment account is only eliminated once for the subsidiary which has activities/ledger balances for the month.
1. There are 3 subsidiaries for parent PRNT1 in the Consolidation Tree.
2. 3 ownership sets are defined.
Each subsidiary is 99% owned by the parent. 1% is owned by by non-controlling outside entities (not listed in the sub ownership and not in the tree)
3. One minority interest set is defined to include different equity accounts for subsidiary and one parent investment account.
4. Each subsidiary ownership set uses this same minority interest set (defined in the consolidation set)
5. A journal is entered in Sept 2013 to record $200,000 equity in Subsidiary ORA01.
6. 99% of this investment need to be reflected in the parent. So a journal is entered in Parent PRNT1 to book Parent Investment.
DR Parent Investment A/C 170000 $198,000 (99% of 200,000)
CR Cash A/C 100001 $198,000
7. Sept 2013 has only these 2 transactions in ledger.
Only one subsidiary has any transactions ORA01.
ORA02 and ORA03 have no activity in 09/2013.
8. Now, run consolidations on this period 9/2013
9. Once process runs to success, it is noted that Parent investment in PRNT1 has been eliminated 3 times.
Expect Parent Investment account is only eliminated once for PRNT1's share of equity in sub ORA01, ie $198,000.
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