Creating Consolidated Financial Statements using Management Reporter – owning less than 100% of a subsidiary (Part 7 of 7)


At times, a company only owns a percentage of another company. In this situation, when producing a consolidated report, it is important to only account for the percentage of ownership you own. Management Reporter uses the Rollup % in the Reporting Tree Definition, and setting this up is outlined in this blog post (the last in a series of blogs on consolidations).

  • Part 1 contains an overview of consolidating data across one or multiple Dynamics ERPs with the same chart of accounts and same fiscal periods.
  • Part 2 describes consolidating across one or multiple Dynamics ERPs with different chart of accounts.
  • Part 3 defines the process for consolidation across one or multiple Dynamics ERPs with different fiscal periods.
  • Part 4 is focused on reporting with multiple Dynamics AX 2009 instances (AOS).
  • Part 5 will show you how to report on consolidation data that resides in non-Dynamics ERPs.
  • Part 6 will discuss how to produce a consolidated report in Management Reporter that includes a column for elimination entries.
  • Part 7 will focus on scenarios where a company does not own 100% of a subsidiary.

In the Reporting Tree Definition, enter the % of ownership in column K, Rollup %, and when the report is generated, that percentage will be used to calculate the consolidated amount. In this example, Contoso only owns 80% of Contoso Denmark. The user can enter 80 in the column, or .8 and 80% will roll up to the consolidated level.

NOTE: You can apply this ownership percentage to any reporting unit, not just at the company level. This is helpful when ownership is at a business unit or division level, not just a legal entity.

At report generation, Contoso Denmark shows its full amount in the report for Contoso Denmark, and only 80% of it is allocated to the consolidated node. In the following example, at the consolidated level for Sales, you can see only 80% shows.

NOTE: For the month of June, Contoso Entertainment did not have any Sales, so Sales only reflects Contoso Denmark in this case.

If you own less than 1% of a company, select “Allow rollup less than 1%” in the Additional Options tab of the Report Settings form, and then the rollup % in the reporting tree will be treated as less than 1%. For example, if the setting is selected, then .8 would .8%, not 80%. Alternatively, you can also enter .008 and leave the setting cleared.

 

NOTE: If you prefer to see minority interest on its own line view this blog for additional information.

The series of blogs has covered the many different consolidation scenarios that a company faces during the reporting process. From multiple Dynamics ERPs, to different charts of accounts, to ownership percentage, Management Reporter is designed to fit your consolidation reporting needs.

Comments (1)

  1. PC says:

    Is this method IFRS compliant? I believe the "equity method" prescribes that for influential participations, the P&L needs to be consolidated for 100%, while the balance sheet goes for the participation percentage. In that case, this method won't work for companies that need to be IFRS compliant. Or what am I missing?

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