Assignment events: intragroup assignments
Management mode¶
Events concerning the assignment of shares or deconsolidation can be managed in the following two modes:
| Management mode | Description |
|---|---|
| Don't manage | Default mode. Only normal financial investment/net equity elimination journals are generated based on the type of event between the seller entity and the sold entity and between the buyer entity, a new owner entity, and the owned entity, which has been sold. |
| With a sales model | You must specify the model of accounts that you want to use, the buyer entity and the sale price, with the accounting sign, in the seller entity currency. |
| Linked purchase event | You must specify the linked event number, i.e. the number of the event corresponding to the initial acquisition of the financial investment whose assignment is being inserted. Once the linked event has been selected, the system automatically defines the linked owner entity as the entity that is the buyer in the linked event. |
Journals generated for management with a sales model¶
In addition to normal financial investment/Net Equity elimination journals, the following journals are also generated:
- A journal of intragroup financial investment assignment between the seller and the buyer, deleting the capital gain.
- A journal of intragroup financial investment assignment between the buyer and the seller to reverse the historical value of the acquired financial investment.
- A journal of financial investment elimination reclassification between the seller and the buyer, if necessary. An exception is made if the entity is sold at cost or in any case the operation does not involve the generation of counterparty eliminations.
- A journal of financial investment elimination reclassification between the buyer and the seller, if necessary. An exception is made if the entity is sold at cost or in any case the operation does not involve the generation of counterparty eliminations.
The journals must have the following characteristics:
- They must be multiple relationship journals, as the sold entity will be specified in their rows.
- The categories and accounts on which the journals will be generated are those indicated in the accounts model selected for the event.
- Journals between the seller and the buyer will be generated in the currency indicated on the event for the seller entity, while journals between the buyer and the seller will be generated in the currency of the buyer in the process. To calculate the amounts, the system will not use the event's FX rates but the FX rates of the current year, looking at the conversion type of the account that is being written.
IMPORTANT: the period average FX rate is not managed.
Journals generated for management with linked purchase events¶
In addition to normal financial investment/Net Equity elimination journals, the following journals are also generated:
- A journal between the seller and the sold entity in which the portion of the seller's capital gain that was not eliminated in the financial investment elimination journal is eliminated, with the reserve account as the offsetting entry. This non-eliminated portion corresponds to the difference between the assignment value and the pro-rata amount of net equity assigned, plus goodwill. The portion that has already been eliminated is the difference between the value of the financial investment and the pro-rata amount of net equity assigned, plus goodwill.
- A journal between the buyer and the sold entity which has the purposes of reconstructing any goodwill present on the elimination between the seller and the sold entity. The offsetting entry is the buyer's reserves in the amount of the total capital gain and the sold entity's reserves for the difference between the total capital gain and the portion of the capital gain eliminated in the previous journal.
The journals must have the following characteristics:
- They are only booked into the consolidation scenarios that include the entities involved.
- The first capital gain elimination journal must be processed on the consolidation scenarios that include the buyer.
- The second journal of reconstruction of goodwill between the buyer and the sold entity must be processed on the consolidation scenarios that include the seller.