PCON & POWN

[Former Member]

Hello Gurus,

I have a quick question. When & why would PCON & POWN values ever be different?(for ownership)

Thanks.

[former_member186498 · Accepted solution]

Hi Zack,

POWN, defines % of ownership

PCTRL, defines % of consolidation

so you can have an entity with POWN 61% but for consolidation is integral (PCON 100%), or POWN 25% and consolidation equity, i.e. PCON 50%

for more information please see https://websmp209.sap-ag.de/instguidesCPM-BPC

Kind regards

Roberto

Edited by: Roberto Vidotti on Jan 30, 2012 4:13 PM

[Former Member · Accepted solution]

Sorry Roberto, I lost you. Please elaborate. thanks.

[former_member186498 · Accepted solution]

Hi Zack,

is veri cpomplicate to explain in detail, I can give you only same rough input.

There are 2 big different standards: european IFRS (the only that I know) and US GAAP, they are similar but not equal. There are several criteria to establish if the ownership is significant and consequently for applying the consolidation method, the first (for the other you must read the documentations of the standards) is the % of ownership: when the amount of stock owned is 20% or less then is considered not significant, between 20% and 50% began to be significant and over 50% the purchased company has control over the acquired company.

So normally < 20% the company will not considered for consolidation i.e POWN 15.4% PCON = 0%

> 20% < 50% normally the method is equity i.e. POWN 31.24% PCON 50%

> 50% the criteria can established that you use proportional or integral (full) consolidation method (f.e. if the rest of investors are not interested in control),

i.e. POWN = 61% and PCON = 61% or 100% respectively.

Maybe in US GAAP the % and some criteria change but in general it's similar to IFRS.

I hope this is more clear know.

for more information please see

[SBOP Plan & Consol 7.5 M Starter Kit Configuration Design|http://service.sap.com/~form/sapnet?_SHORTKEY=01100035870000726400&_SCENARIO=01100035870000000112&_OBJECT=012002523100007426762010E]

http://help.sap.com/saphelp_erp60_sp/helpdata/en/e1/a9733c54a3a032e10000000a114084/frameset.htm

or look in internet

http://en.wikipedia.org/wiki/Consolidation_(business)

[Whats the difference between full consolidation and equity method of accounting?|http://answers.yahoo.com/question/index?qid=20071216042846AAbNIBU]

with google

http://en.wikipedia.org/wiki/International_Financial_Reporting_Standards

http://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles_(United_States)

[us gaap vs ifrs|http://www.google.it/search?q=usgaapvsifrs&hl=en&source=hp&gbv=2&gs_sm=3&gs_upl=1672l6202l0l8592l8l8l0l1l1l0l312l1560l0.2.4.1l7l0&safe=active&oq=usgaap&aq=1&aqi=g10&aql=]

Kind regards

Roberto

Edited by: Roberto Vidotti on Feb 9, 2012 11:22 AM