3 Replies Latest reply: Nov 1, 2013 3:03 AM by user6717983 RSS

    Query on HFM - Journals and Change in ownership

    user6717983

      1. In the HFM rules, when we write rule to carry forward opening balance, the values in Entity Curr Adjs is also carried forward so that closing balance total matches opening balance total. However, since the closing value in Entity Curr Adjs is only calculated as sum of all flow members, the impact of opening balance is still carried forward with the result that when customer loads only GL balance for the period and does not require any journal, the last year journal impact is carried forward. Any suggestions on how this can be handled?

      2. In the Consolidation rule, when there is change in consolidation method during a period (e.g entity contol lost and hence classified as Associate from Subsidiary etc.), how should this be handled? We calcualte VAR flow for variation in scope ( where PCON differs from OPE and curent period). Will this also be handled in same way or is there any other way?

      3. manage ownership - should this be setup for every consolidation cycle or will last cycle structure ( along with methods/pcn/own) will be carried forward and change is required only if needed?

        • 1. Re: Query on HFM - Journals and Change in ownership
          Hyp201207

          1. not sure

          2. When you sell enough shares of a subsidiary that you formerly consolidated and it is now accounted for under the Equity Method or as a trading security, I believe you realize a gain or loss and remove any associated non controlling interest. You should ask the client or accountants for the proposed deconsolidation journal entry. I'd imagine the gain/loss would be loaded and you might need to generate a HFM journal to true up the non controlling interest. You would then change your consol method from "Global" or the like and instead make it the Equity (i think you are calling this Associate?).

          3) When using manage ownership, all entities active value are defaulted to your app settings. I set this to 1. If an entity becomes inactive, i submit a zero. For consolidation methods, I write a rule that defaults it to a certain commonly used method and condition the exceptions. Client submits zero to turn off the default consol method and a 1 for the alternate consol method. POWN defaults to 100% unless otherwise specified. 

          • 2. Re: Query on HFM - Journals and Change in ownership
            Thanos A

            Hi there,

             

            I think that your first question is specific to your application. Each application is built on a different way in order to address the requirements of finance, so in order to understand your question you should give use more details... However, I will attempt an answer...

             

            1.If I understand correctly, your system copies both the closing balance and the journals on the opening balance of the following year and you need only the opening balances. In order to address this, you should find the appropriate part of the rule that is used to carry forward the balances and update it in order to carry forward only the closing balance.

            2.This depends on the consolidation methods that your system supports. There are systems that automatically create the journals to reclassify an entity from Subsidiary to Associate or Subsidiary to Equity. There are other systems in which you have to create a new entity when there is such a change of ownership. Finally, there are other systems that you can post a journal in order to reclassify the entity.

            3. By default, you have to carry forward the ownership to the first period of the following year. After this, you have to update the periods of the year in case of a change.

             

            Regards,

             

            Thanos

            • 3. Re: Query on HFM - Journals and Change in ownership
              user6717983

              Thanks for your feedback guys.