Overview of eliminations of equity investments

The Eliminations of Equity Investments template is used to enter and manage subsidiary ownerships and changes in them. An elimination of equity investments document is created when the subsidiary is formed, that is, when the group has acquired a share that gives them control over the entity (the ownership usually being at least 50%).

The parent company's acquisition costs and subsidiary's equity must be eliminated every month from the consolidated data until the subsidiary is sold or otherwise no longer consolidated as a subsidiary. Subsidiary acquisition data is saved to its own document, and the default document series is 60000.

The entries of different periods differ, for example, due to depreciations and changes in currency rates.

Based on the data entered to the Basic data and Depr_amort worksheets, the following elimination entries are created:

•The carrying amount of the parent unit's investment in the subsidiary

•The parent unit's share of the equity of the subsidiary at the time of acquisition

•Fair value adjustments/goodwill allocations

•Deferred tax assets/liabilities relating to the allocations

•Goodwill

•Depreciation/amortisation of the allocations according to the plan

•Impairment losses and exceptional depreciations on allocated amounts according to the entered changes

•Changes in deferred tax balances due to depreciations, amortisations and impairment losses

•Accumulated translation differences from the date of the acquisition

Overview of eliminations of internal margins in non-current assets

Internal margins that are activated in the balances of group enterprises are subtracted when compiling the group balance from their corresponding items and equity. The change in internal margins is eliminated from the financial year revenue. Internal margins and their fluctuations are entirely eliminated, independent of the group share in the enterprise that has disposed of or received goods with internal margins.

Based on the data entered to the Basic data and Depr_amort worksheets, the following elimination entries are created:

•The sales profit/loss recorded in the unit which sold the asset

•Adjustment to asset values (reversal of sales profit/loss)

•Deferred tax assets/liabilities relating to the adjustments of asset values

•Depreciation adjustments according to the changed depreciation plan (seller vs. buyer)

•Changes in deferred tax balances due to depreciations

•Accumulated translation differences from the date of the transaction