Eliminate Investment In Subsidiary - Oracle Financial Consolidation Hub User Manual

Eliminate Investment in Subsidiary

You want to eliminate APAC and Subsidiaries' Investment in Subsidiary for Japan.
Since the relationship is a Full consolidation type, 100% of the balances in Japan are
aggregated to APAC and Subsidiaries. However, since APAC and Subsidiaries already
records its Investment in Subsidiary for Japan, you want to reduce that investment
against Japan's equity in order to avoid double counting. Since APAC and Subsidiaries
only owns 80% of Japan, you only want to eliminate the portion of equity owned.
Assume that the equity accounting consolidation rule is in the equity accounting
category that enables you to track each child separately functionality and writes to the
elimination entity. The consolidation rule will have three steps.
Step 1: Eliminate Investment in Subsidiary
For simplicity, assume that APAC and Subsidiaries paid the market value for Japan.
Therefore, its investment in Japan is equal to Japan's equity times its ownership
percentage. To eliminate Investment in Subsidiary, we reduce APAC HQ's Investment
in Subsidiary by the amount of equity owned in Japan.
The rule step finds any balances in the source entity whose Line Item is 3000 - Equity
and creates a consolidation entry that is equal to the Percent Ownership multiplied by
those balances. The consolidation entry is written to the line item 1820 - Investment in
Subsidiaries.
9-8 Oracle Financial Consolidation Hub User's Guide