Reclassification of MI at posting level 30

[Former Member]

Hi Experts

I need some help to clarify the behaviour of a stantard reclasification at posting level 30, we have the following group hierarchy (G1-G3

are groups and C1-C6 are companies)

G1
 u2514u2500u2500C1  <---Parent Unit
 u2514u2500u2500C2
 u2514u2500u2500G2
     u2514u2500u2500C3 <---Parent Unit
     u2514u2500u2500C4
     u2514u2500u2500G3
         u2514u2500u2500C5 <---Parent Unit
	 u2514u2500u2500C6

C1 has investments in C2 and C3

C3 has investments in C4 and C5

C5 has investments in C6

We use consolidation of investments and make additional reclasifications reading the posting level 30 information generated from the COI

task for the following purpose:

Most of the Minority Interest that comes from the Equity Accounts needs to be generated with group shares, but only 2 equity accounts need

to generate MI with direct shares, but the accounting technique can only be assigned only per method and per company, not for each account.

For that we created a standard reclasification that cancels the postings that affect those two equity accounts against the MI account and

Example:

C1 has 90% share in C3

C2 has 80% share in C5

C5 has 100% share in C6

At G1 level the group share for C6 is 72%

C6's equity is composed of

Common stock (CS)  		5000.00  <----direct share (this according to local GAAP)
Reserve	(RS)			2000.00  <----group share
Retained Earnings (RE)	 	3000.00  <----group share

The postings for MI for each group are:

Document Type: I1
Group	Company		Account		Amount
G2	C6		CS		-1000.00
G2	C6		RS		 -400.00
G2	C6		RE		 -600.00
G2	C6		MI		 2000.00
G1	C6		CS		 -400.00
G1	C6		RS		 -160.00
G1	C6		RE		 -240.00
G1	C6		MI		  800.00

The reclassification we want is for canceling the postings for the CS account to the MI account considering that the postings that generate

the MI with group share are those that are located at upper level groups (in this example there is no MI at G3 group):

Group	Company		Account		Amount
G2	C6		CS		 1000.00 <---Step 1 in method
G2	C6		MI		-1000.00 <---Step 1 in method
G1	C6		CS		  400.00 <---Step 2 in method
G1	C6		MI		 -400.00 <---Step 2 in method

The configuration for each step in the Reclassification method is the following

Step 1:
			Trigger			Source			Target
Item			CS			CS			MI
Company			C6			---			---
Cons Group		G2			G2			G2
Document Type		I1			---			---

Step 2:
			Trigger			Source			Target
Item			CS			CS			MI
Company			C6			---			---
Cons Group		G1			G1			G1
Document Type		I1			---			---

The group is important in the postings because we want to check in the consolidated financial statement the effects of MI in different

groups but when we do a reclassification the log show us that for the same step 1 the task generated a reclassification for group G1 and G2

first generating the correct reclassification in G2 but cancelling it in G1, so the postings look like this:

Group	Company		Account		Amount
G2	C6		CS		 1000.00 <---Correct (Step 1)
G2	C6		MI		-1000.00 <---Correct (Step 1)
G1	C6		CS		-1000.00 <---Unexpected (Step 1)
G1	C6		MI		 1000.00 <---Unexpected (Step 1)
G1	C6		CS		  400.00 <---Correct (Step 2)
G1	C6		MI		 -400.00 <---Correct (Step 2)

From G1 perspective the total MI is without the adjustment we want but from G2 perspective the MI is correct.

We decided to change step 1 to the following configuration for the purpose of correcting at least G1:

Step 1:
			Trigger			Source			Target
Item			CS			CS			MI
Company			C6			---			---
Cons Group		G2			G1			G1
Document Type		I1			---			---

It generates the following postings:

Group	Company		Account		Amount
G1	C6		CS		 1000.00 <---Step 1 in method (not the group we expect)
G1	C6		MI		-1000.00 <---Step 1 in method (not the group we expect)
G1	C6		CS		  400.00 <---Step 2 in method
G1	C6		MI		 -400.00 <---Step 2 in method

This at least solves the problem from G1 perspective but for G2 we don't have a posting

Any lead on how to solve this problem is highly appreciated

Best Regards

Paul

Edited by: Paul Heredia on Oct 28, 2011 2:31 PM

[former_member209721 · Accepted solution]

My first impression is that your case is quite complex and not following 'standard' principles. That's why I am wondering if it is really relevant to try to automate this.. why not simply post these corrections manually?...

Then, if you really need to automate this kind of 'cons group-specific' postings, I think there's a new functionality in EHP5: apparently you can now manage postings that are only applicable to certain cons groups. You should have a look to the documentation. I had quite a similar issue last year, and this new feature could have been a solution (but EHP5 was not realeased)