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Jan 31, 2008 at 02:43 PM

Sequence of Activities & Divestiture


Our 4.0 implementation uses the default COI sequence of activities below:

Seq # Act. Activity text Stop here

1 01 First Consolidation

2 16 Horizontal Merger

3 04 Amortization of Fair Value Adjustments

4 05 Increase in Capitalization

5 06 Reduction in Capitalization

6 07 Step Acquisition

7 08 Partial Transfer

8 09 Total Transfer

9 17 Vertical Merger

10 10 Partial Divestiture X

11 11 Total Divestiture

12 12 Liquidation

13 13 Reclassification of Treasury Stock

14 14 Amortization of Investment

15 15 Writeup of Investment

16 02 Subsequent Consolidation

17 03 Amortization of Goodwill

18 18 Distribution of Dividends

When we recorded an end-of-period total divestiture (via AFD), the COI log does the following:

1. Partial divestiture from 100% to 0% - reversing first consolidation elimination of investment, recording 100% to minority interest balance sheet, and recording gains

2. Subsequent consolidation – because ownership is now considered 100% the entire earnings for the period of divestiture is recorded as minority interest

3. Total divestiture – reversing first consolidation elimination of equity, reversing minority interest balance sheet from partial divestiture above, and gain for earnings of period of divestiture

What bothers me is that subsequent earnings recoded 100% minority interest. Why would this occur when the divestiture is at the end of the period per the master data? Should the activity sequence number for subsequent consolidation change to a number lower that for partial and total divestiture, but remain after the Stop? If so what are the consequences?

The only other alternative I can think of is to leave the activity sequence alone and record the divestiture at the beginning of the next period.

Any help with this is appreciated.