Skip to Content
0
Former Member
Jun 04, 2009 at 08:55 AM

Acquisition in the middle of the month

311 Views

Hi All,

I have a query on how Consolidation of Investments will be done when there is acquisition happening in the middle of the month. Just to make it clear i am quoting an example

1. Company A is holding 20 % in Company B. As company B is an associate of company A consolidation is done as per Equity method. Then Company A acquires additional 40 % on 15th of a month. So Company B is associate from 1st to 15th and Subsidiary from 15th to Month end.

In this case the equity method will be applied for half of the month and purchase method will be applied for next half of the month. This poses two issues

a. I will have to consider P/L of company B only for half of the month (15th to end of the month). As we are loading monthly data and not the date wise data into BCS how do we take care in this situation.

b. even for GW/Minority Interest calculation I will have to consider Equity and Profit earned till 15th.

I can enter whether the acquisition is at the beginnning of the month or at the end of the month but there is no place to enter any mid month acquisition..

Pl let me know the solution or any pointers.

Shivaprasad