Other types of event
Capital increase
This type of event is used when an owned entity resolves to carry out an increase in its share capital and said increase is subscribed by the parent entity for its share in the ownership. In this type of event, the ownership percentage does not change from the previous event.
The ownership structure register is fed as follows:
- The value of the subscribed financial investment.
- The variance in net equity (share capital and any other reserves) of the owned entity.
- The ownership percentage.
When an event of this type occurs, a journal comprising the rows listed below is generated in the currency of the buyer entity:
- Financial investment elimination rows
- Net equity elimination rows
Capital decrease
This type of event is used when an owned entity resolves to carry out a reduction in its share capital. In this type of event, the ownership percentage does not change from the previous event.
The ownership structure register is fed as follows:
- The value of the write-down on the financial investment held.
- The variance in net equity (share capital and any other reserves) of the owned entity.
- The ownership percentage.
When an event of this type occurs, a journal comprising the rows listed below is generated in the currency of the buyer entity:
- Financial investment elimination rows
- Net equity elimination rows
Merger (merged owner entity) - initial consolidation
This type of event is used when a group entity that is also owned by other entities is merged into another entity and thus changes the shareholding relationships of all the companies that it owns. This event must be used in the new shareholding relationship between the merging entity and the child companies of the incorporated entity.
The ownership structure register is fed as follows:
- The value of the acquired financial investment. In this case, you should use an incoming financial investment variation related to the merger that will not be automatically eliminated on the basis of the ownership structure register. Therefore, accounts defined in financial investment elimination logics from the ownership structure register must not be used.
- The entity's net equity need not be specified unless it has changed.
When an event of this type occurs, a journal comprising the rows listed below is generated in the currency of the buyer entity:
- Financial investment elimination rows on the incoming merger variation (row fed by the merger data processing).
- Net equity elimination rows. These are only generated by the merger data processing if the Calculate mergers on net equity option was selected. For details on the setup of mergers, see Mergers page.
Merger (merged owner entity) – deconsolidation
This type of event is used when a shareholding relationship between an incorporated company, which disappears following the merger, and its child entities, is closed.
The ownership structure register is fed with the ownership percentage equal to zero. CCH Tagetik then deconsolidates the elimination journal of the financial investment linked to that relationship.
For details on the setup of mergers, see Mergers page.
Merger - Owned entity incorporated in owner entity
This type of event is used when an entity is incorporated by the parent entity. The existing financial investment event is therefore cancelled out by a new event.
The ownership structure register is fed with the ownership percentage equal to zero. CCH Tagetik then deconsolidates the elimination journal of the financial investment linked to that relationship.
For details on the setup of mergers, see Mergers page.
Merger (merged owned entity) - initial consolidation
This type of event is used to label a new shareholding relationship that arises between the incorporated entity's parent entity and it's incorporating entity.
The ownership structure register is fed as follows:
- The value of the acquired financial investment. In this case, you should use an incoming financial investment variation related to the merger that will not be automatically eliminated on the basis of the ownership structure register. Therefore, accounts defined in financial investment elimination logics from the ownership structure register must not be used.
- The entity's net equity need not be specified unless it has changed.
When an event of this type occurs, a journal comprising the rows listed below is generated in the currency of the buyer entity:
- Financial investment elimination rows on the incoming merger variation (row fed by the merger data processing).
- Net equity elimination rows. These are only generated by the merger data processing if the Calculate mergers on net equity option was selected. For details on the setup of mergers, see Mergers page.
Merger (merged owned entity) - deconsolidation
This type of event is used when a shareholding relationship between a merged entity and the parent entity, which is not involved in the merger as it is not the merging entity, is closed.
The ownership structure register is changed and the ownership percentage becomes zero. CCH Tagetik then deconsolidates the elimination journal of the financial investment linked to that relationship.
For details on the setup of mergers, see Mergers page.
Other
This type of event is used in all cases in which the user intends to generate a financial investment elimination journal from the ownership structure register, but without any automation on the goodwill, reserve or other accounts.
The ownership structure register is fed as follows:
- The ownership percentage.
- The value of the financial investment.
- The owned entity's net equity value.
When an event of this type occurs, a journal comprising the rows listed below is generated in the currency of the buyer entity:
- Financial investment elimination rows
- Net equity elimination rows
Any balancing must be inserted manually.
Previous release: initial and step up consolidation
This type of event is used by the system in release steps to ensure continuity in the data processing with regard to old setups.
Note: CCH Tagetik labels an event in this way when, up to release 3.0903, the financial investment elimination journal was generated from the ownership structure register and the automatic calculation of goodwill was requested (Generate goodwill option active).
The ownership structure register is fed as follows:
- The new ownership percentage.
- The value of the financial investment. This value is loaded onto a variation account (typically increases or other entries).
- The owned entity's net equity value.
When an event of this type occurs, a journal comprising the rows listed below is generated in the currency of the buyer entity:
- Financial investment elimination rows
- Net equity elimination rows
- Goodwill account indicated in the financial investment elimination logics from the ownership structure register. CCH Tagetikcalculates the difference between the value of the financial investment and the sum of the net equity accounts present in the elimination and writes that value on the variation goodwill account, stating the adjusted financial investment's variation account as the reason. If no variations have been created for the goodwill account or the specific variation account has not been related to the process, the value is written on the normal goodwill account.
Previous release: other
This type of event is used in release steps to ensure continuity in the data processing with regard to old setups.
Note: CCH Tagetik labels an event in this way when, up to release 3.0903, the financial investment elimination journal was generated from the ownership structure register and the automatic calculation of goodwill was not requested (Generate goodwill option not active).
The ownership structure register is fed as follows:
- The new ownership percentage.
- The value of the financial investment. This value is loaded onto a variation account (typically increases or other entries).
- The owned entity's net equity value.
When an event of this type occurs, a journal comprising the rows listed below is generated in the currency of the buyer entity:
- Financial investment elimination rows
- Net equity elimination rows
- Goodwill account. The goodwill is loaded since, in new releases, the system calculates goodwill automatically, different from the previous releases in which the specific Generate goodwill option had to be activated. The system calculates the amount related to the portion of goodwill to be written off, by multiplying the amount of the Goodwill reversed in the journal, if present, by the variance in the ownership percentage. In case of event journals, this calculation takes account of all the goodwill present in that relationship's elimination journals (preceding the event). The adjusted variation goodwill account is the account dedicated to changes in the ownership percentage (reductions). If no variations have been created for the goodwill account or the specific variation account has not been related to the process, the value is written on the normal goodwill account.