Periodic minorities calculation

How it works

The minorities calculation can be performed periodically on the following accounts:

• Profit & loss accounts
• Other variation accounts
• Variation accounts
• Normal net result account in the Balance Sheet

On the selected accounts, CCH Tagetik runs the following:

1. It copies the previous period’s minorities calculation rows.
2. It adds the minorities calculation of the period being processed to the periodic amount (period amount - previous period amount), applying the minorities percentage of the period to be processed (consolidation % - period equity ratio %).

The difference between minorities on the P&L profit account, calculated on a periodic basis and the minorities on the Balance Sheet profit account, calculated on a cumulated basis, is allocated to the account defined as the carry forward of the balance sheet Net result (group and minorities) in the carry forward rules. The percentage variation account defined in the variation control group is also adjusted at the same time.

For all balance sheet accounts, the percentage variations on the variation accounts compared with the previous period are allocated to the variation accounts dedicated to the percentage variation. The variations for the percentage variation in minorities are calculated based on the value of the normal and detail accounts.

Percentage variance calculation

CCH Tagetik calculates two types of percentage variance:

• previous % variance = previous scenario/period amount * (current period minorities % - previous final minorities %)
• current % variance - amount of scenario/period to be processed * (current final minorities % - current period minorities %). This only produces variation amounts if the period equity ratio percentage is different from the final equity ratio percentage.

In both cases CCH Tagetik generates rows on the following accounts:

• control group percentage variation account
• minorities percentage variation account

These accounts are indicated in the group account control group and the minorities account control group, respectively.

Thiscalculation method is useful for changes to an entity’s equity ratio and consolidation % during the year.

In the periodic minorities calculation settings, it is possible to select the events to be considered for the calculation of period percentages, overriding those which the system considers automatically based on the reference date for the periodic minorities calculation. See Minorities Rules page.

IMPORTANT: to identify the previous period, CCH Tagetik uses the period length defined on the consolidation scenario/period.

IMPORTANT: the calculation strategy (periodic or cumulated) must be the same for all periods of the same scenario. When the strategy is changed, the previous period must be processed with the new algorithm.

Example

This example compares the cumulated minorities calculation and the periodic minorities calculation on a Reserves account and on the balance sheet Net result account.

Period 01

• Minorities %: 30%
• Reserves: -1,000
• Net result

Period 06

• Minorities: 20%
• Reserves: -1,000
• Net result: -150

Period 12

• Minorities: 20%
• Reserves: -1,000
• Net result: -200

The following tables show the cumulated minorities calculation and the periodic minorities calculation at period 12.

Period 12 cumulated minorities calculation

Minorities reserves	-200	(-1000*20%)
Minorities net result	-40	(-200*20%)
Reserves	200
Net result	40

Period 12 periodic minorities calculation

Minorities reserves	-200	(-1000*20%)
Minorities net result	-55	(-150*30% + 50*20%)
Reserves	200
Net result	55
Minorities reserves	15	(-40-(-55))
Reserves	-15