Ownership structure register diagnostic reports

Introduction

Diagnostic reports can be generated to verify the events inserted in a given period for the financial statements of the owner entity and owned entities.

In particular, these diagnostic reports allow you to check the following aspects:

• Congruence between the value of the financial investment and the owner entity's financial statements. See Owner entity financial investments/financial statements congruence diagnostics.
• Congruence between the net equity and the owned entity's financial statements. See Owned entity net equity/financial statements congruency diagnostics.
• Congruence between the value of the financial investment and the net equity for each individual event. See Financial investments/Net equity congruence diagnostics.
• Congruence between the assignment date indicated in the entity's elements table and the information inserted in the ownership structure register. See Assignment date congruence diagnostics.
• Deconsolidation method table congruence. See Deconsolidation type table check diagnostics.
• Congruence of the deconsolidation method at the ownership structure register level. See Ownership structure register check deconsolidation type diagnostics.

A single Excel file is generated, with one sheet for each requested type of diagnostics.

Owner entity financial investments/financial statements congruence diagnostics

These diagnostics report the following data:

• Owner entity (parent entity)
• Owner entity description
• Owned entity (child entity)
• Owned Entity description
• Category
• Category description
• Account
• Account description
• Custom dimension 1...5 (ONLY if custom dimensions are managed)
• Financial Statement currency data
• Financial statement data
• Currency - Ownership structure register
• Data - Ownership structure register
• Variance (financial statements data – ownership structure register data)

The diagnostic is generated by comparing the values of the financial investment indicated in the ownership structure register with those present in the owner entity's financial statements. In particular, CCH Tagetik runs the following operations:

• For financial statement data, it reads the intercompany entries and the entity journals with a counterparty defined by applying the set filters.
• For financial investment entries, the diagnostic only considers entries related to events preceding the end date of the scenario/period to be diagnosed by applying the set filters.

The displayed data are contained in the Events - Owner FS Own. - FI sheet and grouped by dimension (Entity, Counterparty Entity, Category, Account, Custom dimension 1...5 and Currency). If necessary, the amount read from the financial statements data is converted into the currency of the owner entity indicated in the ownership structure register.

Owned entity net equity/financial statements congruency diagnostics

These diagnostics report the following data:

• Owned entity (child entity)
• Owned Entity description
• Category
• Category description
• Account
• Account description
• Custom dimension 1...5 (ONLY if custom dimensions are managed)
• Financial Statement currency data
• Financial statement data
• Currency - Ownership structure register
• Data - Ownership structure register
• Variance (financial statements data – ownership structure register data)

The diagnostic is generated by comparing the value of the net equity variations indicated in the ownership structure register with those indicated in the financial statements for the owned entity. In particular, CCH Tagetik runs the following operations:

• For financial statement data, it reads amounts and entity journals by applying the set filters entered on variation accounts in the Net equity section of the ownership structure register accounts configuration, if the Use on Ownership structure register option is selected. See .
• For net equity variations indicated in the ownership structure register, the diagnostic only considers entries related to events that fall between the start date and the end date of the selected scenario/period.

The displayed data are contained in the Events - Owner FS Own. - N.E. Variations sheet and grouped by dimension (Entity, Counterparty Entity, Category, Account, Custom dimension 1...5 and Currency).

Financial investments/Net equity congruence diagnostics

These diagnostics run the following operations:

• They read the history of financial investment relationships between the group entities for the event scenario indicated on the process associated with the selected scenario/period, with event dates falling between the start date and the end date of the selected scenario/period, and related to the owner entities indicated in the filter.
• They sort the data by Owner Entity, Owned Entity and event date and compare every event with the previous event, reporting the following information for every event:
• Whether unneeded net equity normal accounts are present. When the ownership percentage has not changed since the previous event and there are normal accounts in the net equity entry.
• Whether the financial investment variation is different from the pro-rata amount of the net equity variation. A message is reported in these cases:
  • The ownership percentage of the event in question has not changed since the previous event.
  • At least one of the financial investment's variation accounts requires a change in net equity.
  • Net equity variation accounts are present.
  • The following expression is not checked: financial investment variation = net equity variation * FX rate * ownership % of the event
• Whether net equity variation accounts are missing. When the following conditions are met:
  • At least one of the financial investment's variation accounts requires a change in net equity.
  • Net equity variation accounts are not present.
• Whether unneeded net equity variation accounts are present. When the following conditions are met:
  • None of the financial investment's variation accounts require a change in net equity.
  • Net equity variation accounts are present.
• Whether net equity normal accounts are missing. When the following conditions are met:
  • The ownership percentage of the event in question has changed since the previous event.
  • No normal net equity accounts are present.
• Whether the net equity differs from the net equity in the child entity's financial statements. When the following conditions are met:
  • The ownership percentage has changed since the previous event.
  • Net equity normal accounts are present.
  • There is at least one account whose value (read from the structure register) differs from the value read from the owned entity's financial statements immediately preceding the event. To obtain the financial statement data, CCH Tagetik reads the pre-consolidation amounts and adjustments where the scenario is the previous scenario of the scenario selected in the filter, the period is the maximum period of the previous scenario, the entity is the owned entity for the event in question, the accounts are those resulting when the Use Account for setup attribute indicated in the elements table is Net equity and, lastly, the amount and entity journal categories not defined as "child categories".

• Goodwill calculation. If the ownership percentage of the event in question has changed since the previous event, the system calculates goodwill as A+B+C, where:

  • A = financial investment variation (calculated as the sum of the carrying values for the event in question)
  • B = net equity variation (calculated as the sum of the net equity values related to the variation accounts) * FX rate of the event in question * ownership % of the event in question
  • C = Net equity normal accounts (calculated as the sum of the net equity values related to the normal accounts) * FX rate of the event in question * change in ownership percentage of the event in question since the previous event.

  The displayed data are contained in the Events - Net equity, Events- F.I. variations- Net equity variations, Events- Net equity value, Events- Goodwill sheet.

Assignment date congruence diagnostics

These diagnostics show any inconsistencies between the assignment date indicated in the entities table and the information inserted in the ownership structure register. The results of these diagnostics are contained in the Assignment date congruence sheet and report the following data:

• Owned Entity
• Owned Entity description
• Assignment date table
• Assignment date - Ownership structure register
• Error description

In particular, CCH Tagetik runs the following operations:

• Identifies, in the entities table, all the entities assigned in the period (assignment date defined in the entities table) that result from the set filter.
• Identifies, in the ownership structure register, all relationships existing at the period start date which have an ownership percentage other than zero and are subject to assignment in the period, in relation to the owner entities indicated in the filter.
• Compares, for each entity, the assignment date present in the table with the event date of the obtained relationships and behaves as follows:

Condition	Message displayed
Both dates are defined but are different.	"Assignment date isn't consistent".
Only the assignment date present in the table is defined.	"Only sold Entity in the table"
Only the event date of the relationship obtained from the ownership structure register is defined.	"Only sold in the structure register"

The displayed data are contained in the Assignment date congruence sheet.

Deconsolidation type table check diagnostics

These diagnostics are generated by comparing, for a given original scenario/period, the Deconsolidation method indicated in the Override Entity parameters on Original scenarios (see ) and the consolidation parameter indicated for every consolidation scenario with the indicated scenario as the reference original scenario (see ). In particular, the diagnostic reports the entities whose Deconsolidation method is not "Not to deconsolidate" on the overrides table, but is "Not to deconsolidate" on the elements to be consolidated.

The results of these diagnostics are contained in the Deconsolidation type table check sheet, which reports the following data:

• Entity
• Entity description
• Table deconsolidation type
• Consolidation scenario
• Scenario description
• Elements to be consolidated deconsolidation type

The displayed data are contained in the Deconsolidation method table check sheet.

Ownership structure register check deconsolidation type diagnostics

• These diagnostics are generated by comparing, for a given original scenario/period, the Deconsolidation method indicated in the Override Entity parameters on Original scenarios (see ) and the ownership % indicated in the last accrual event present in the ownership structure register. In particular, the diagnostic reports the entities whose Deconsolidation method is not "Not to deconsolidate" and whose ownership % is not 0.

The results of these diagnostics report the following data:

• Owned entity (child entity)
• Owned Entity description
• Owner (parent entity)
• Owner entity description
• Event number
• Event date
• Ownership %

The displayed data are contained in the Ownership structure register check sheet.