Extraordinary Amortization of Goodwill

Hi,
I want to adjust the value of goodwill thru Impairment Test. Can it be done thru extraordinary amortization of goodwil?
Please suggest,
Thanks,
USR

Found the answer

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Amortization of Goodwill after method change

Hi all,
Need some help.
It is not really clear to me how does BCS take into account (equity-method)goodwill, and further more - amortization of goodwill, in/after Method Change activity.
Business scenario
Step 1.
Company "A" (equity - 1000 monetary units) is consolidated using equity method (25%) since Q4/2005 (parent company invested 4000 monetary units).
Step 2.
At the end of Q4/2006 method change takes place, equity to purchase (25% --> 51%).
Step 3.
At the end Q4/2007 parent company increases its ownership in company "A" (51% --> 60%).
Customizing
- COI method "METH1" utilizes equity method as an accounting technique. Acquisitions - group shares. Extraordinary amortization of goodwill
- COI method "METH2" utilizes purchase method as an accounting technique. Acquisitions - group shares. Ordinary amortization of goodwill, starting next Q, during 20 years.
Expected behavior
Step 1.
Equity-method goodwill arises (3750 monetary units).
Step 2.
"New" goodwill arises (3910 monetary units) from 26% (25% --> 51%).
Method changes from "METH1" to "METH2".
Next Q (Q1/2007) goodwill (3750 + 3910) is amortized - 95,75 (over 20 years, per Q).
Step 3.
"New" goodwill arises from 9% (51% --> 60%) and amortized next Q.
"Previous" is amortized.
Reality bites...
Step 1.
Equity-method goodwill arises (3750 monetary units).
Step 2.
"New" goodwill arises (3910 monetary units) from 26% (25% --> 51%).
Method changes from "METH1" to "METH2".
Next Q (Q1/2007) goodwill remains the same - goowdwill is not amortized.
Step 3.
"New" goodwill arises from 9% (51% --> 60%).
Only the newly arised goodwill (9%) is amortized next Q.
"Previous" is still not amortized.
Is it "standard" behavior?
What causes the difference in Steps 2 and 3?
Thanks in advance.

Hello Anton,
It's a complicated question that might be answered, IMHO, only by people who experienced the situation. Or by those who make some experiments in the system. Looks like there is nobody who have or did this. Sorry!

COI Investment data reading

if the AFD Investment data has to be read thru 'Totals' tables does it require that all ECC entry for investment need to have the Percentage of investment, Investee fields to be filled in? Can the system read the 'ECC Investment data' with out these fields?
Is there any other way to populate these fields when reaching from ECC to BI/BCS?
Is there any other additional fields to be captured in ECC for Investment entries other than above two fields?

Hi Eugene,
I really need your advice on my AFD things. Hope you can help
Now my Location Values of AFD are as follows:
Read Investment Data From : Additional Financial Data
Read Equity Data From : Additional Financial Data
Read Equity Holdings Adjs From : Additional Financial Data
The user is only performed "Impairment Test" for the goodwill.
So I only select : "Extraordinary Amortization of Goodwill & Extraordinary Amortization of Negative Goodwill" per method.
My question is, for first consolidation, what should I put in AFD manual data entry as first step to record investment, equity & the goodwill? Will the system calculate the goodwill automatically or we need to manually entered journal entry for impairment test?
Providing that the holding company owns 73% of its subsidiary.
Thanks a bunch

Amortization calculation for an asset

Dear All,
I received a requirement from the users to do amortization for a fixed asset. Can somebody please help me to understand the business process of amortization and what is the requirement to do amortization for a fixed asset since I do not have prior experience on this.
I am looking forward your help
Thanks & Regards
Ramki

Hi Ramki,
I'm not sure if you really mean amortization:
The process of reducing the value of intangible assets by spreading the costs over the useful life of the asset.
This can also be achieved by making a value adjustment on the balance sheet key date. From a consolidation point of view, the amortization of goodwill during the first consolidation is relevant. Typically, the procedures for amortization are governed by external regulatory bodies.
Or if you mean depreciation:
http://help.sap.com/saphelp_46c/helpdata/de/4f/71fd71448011d189f00000e81ddfac/frameset.htm
hiere you'll find under the 4th link a complete documnetation
regards Bernhard
Edited by: Bernhard Kirchner on Oct 22, 2010 12:18 PM

Sequence of Activities & Divestiture

Our 4.0 implementation uses the default COI sequence of activities below:
Seq #     Act.     Activity text                   Stop here
1     01     First Consolidation
2     16     Horizontal Merger
3     04     Amortization of Fair Value Adjustments
4     05     Increase in Capitalization
5     06     Reduction in Capitalization
6     07     Step Acquisition
7     08     Partial Transfer
8     09     Total Transfer
9     17     Vertical Merger
10     10     Partial Divestiture                           X
11     11     Total Divestiture
12     12     Liquidation
13     13     Reclassification of Treasury Stock
14     14     Amortization of Investment
15     15     Writeup of Investment
16     02     Subsequent Consolidation
17     03     Amortization of Goodwill
18     18     Distribution of Dividends
When we recorded an end-of-period total divestiture (via AFD), the COI log does the following:
1.     Partial divestiture from 100% to 0% - reversing first consolidation elimination of investment, recording 100% to minority interest balance sheet, and recording gains
2.     Subsequent consolidation because ownership is now considered 100% the entire earnings for the period of divestiture is recorded as minority interest
3.     Total divestiture reversing first consolidation elimination of equity, reversing minority interest balance sheet from partial divestiture above, and gain for earnings of period of divestiture
What bothers me is that subsequent earnings recoded 100% minority interest. Why would this occur when the divestiture is at the end of the period per the master data? Should the activity sequence number for subsequent consolidation change to a number lower that for partial and total divestiture, but remain after the Stop? If so what are the consequences?
The only other alternative I can think of is to leave the activity sequence alone and record the divestiture at the beginning of the next period.
Any help with this is appreciated.

Dan,
Been looking at this myself these last few days. I know conventional wisdom is to not touch the sequence, but I can't see the delivered sequence working correctly (ever) in the case of divestitures if there is activity in the period. As discussed, perhaps this is what makes people chose the DABP option.
In addition to your case with the M/I due to the subsequent consolidation, if you were to issue a dividend in the period of divestiture that dividend income would be reclassed to minority interest as well.
My solution on the dividends to was to bring the activity above the partial transfer step, with the reasoning that in the event of a transfer you would be dividending to the old parent, not the new parent. Testing so far of our likely C/I activites seems to work with the sequence as desired.
For the subsequent consolidation I'm also having issues that we've PL30 topsided around, but I wouldn't want to do that in a transfer because of the income statement adjustments that would be necessary and the statistical account impact. In a future total divestiture activity, the gain/lose would be incorrectly calculated unless I got those statistical balances spot on to agree with the manual PL30.
I suspect the subsequent consolidation should be after the total transfer or vertical merger, with the reasoning that this activity should be performed in the new parent (err...cons group) in this case. Haven't had a chance to test all our likely activities with this scenario, but will probably need a solution real soon.
I'm familiar w/ this note on the topic, wihch is essentially the help.sap.com documentation in a little more technical detail:
https://service.sap.com/sap/support/notes/698955
But I'm not aware of any other documentation on the subject.
Finally....I remember when I took the SEM240 class a while ago they harped on not touching the default sequence, but those of us in the room with a live implementation had all changed from the default sequence.
Anyway...I don't really have a question or helpful info. Just surprised there's nothing more on the topic.
Chris

Transfer Under SEM-BCS

Hi Experts,
I am using additional financial data for Investments and Equity Data.
I want to perform transfer of Consolidation unit from One Group to another Group.
However, when I execute Transfer activities along with Change Organizational function, the Financial Data is transferd to target group but Goodwill data is not posted to Transferee Company.
Please suggest the procedure for Total Transfer with or without affecting Net Income.
Warm Regards,
USR

Hi,
I guess you tick the "extraordinary amortisation of goodwill" in the C/I system utilisation.
If you tick this function, then you have to provide the usefull life for its amortisation.
Hope it helps.
regards,
Halim

Consolidation of Financial account

Dear All
My comp has executed the consolidation module for the finalisation of Financial statements .Can anybody help me out the process/Procedure to be followed for the testing of the consolidation .
With Best Regards
Saroj

The below given are NOT the steps, but activities required for consolidation of investments.
Enjoy ECCS,
Ambadas
1     First consolidation
2     Subsequent consolidation
3     Amortization of goodwill
4     Amortization of hidden reserves/FVAs
5     Increase in capitalization
6     Reduction in capitalization
7     Step acquisition
8     Partial transfer
9     Total transfer
10     Partial divestiture
11     Total divestiture
12     Liquidation
13     Reclassification of treasury stock
14     Amortization of investment
15     Write-up of investment
16     Horizontal business combination
17     Vertical business combination
18     Distribution of dividends
20     Increase in indirect investment
21     Reduction in indirect investment
22     Indirect transfer
23     Currency translation of goodwill
32     Purchase -> Proportional
33     Purchase -> Equity
34     Purchase -> Mutual stock
42     Proportional -> Purchase
45     Proportional -> Equity
46     Proportional -> Mutual stock
48     Equity -> Purchase
50     Equity -> Proportional
52     Equity -> Mutual stock
54     Mutual stock -> Purchase
56     Mutual stock -> Proportional
57     Mutual stock -> Equity
58     Method change
38     History
29     Push-down

COI First Consolidation (matrix)

Dear all,
We have a matrix consolidation where we are implementing Consolidation of Investments. Because of the matrix, we need to define the equity and investment values on both units. However we only have one legal axis (other one is only for management reporting). Technically the system will post goodwill because of differences in combinations. How can we prevent this? We only want the total value for equity and investment on one unit. Otherwise we have to load data on all combinations and even with a small amount.
Thanks in advance, Bobby Rijken

After changing the period, I am able to execute the task but it works only for CU04 and other CUs' left out.
CU04, CU03, CU02 are 100% Subsidiary of CU01.
Where do i define 100%parent and subsidiary relationship. In Accounting Technique I have selected the parent Company and I am using Purchase Method which I think will automatically consider 100%Minority Interest.
When I execute task for COI:
Doc. is posted but there is no investement detail
the doc. should look like as under:
First Consolidation under which
1. Investment
2. Equity
3. Differential
4. Document : cu01 invest(-)
cu01 invest
cu03 ordin share
cu01 gw 1
cu03 ordin share(-)
Amortization of Goodwill
1.
But in actual the following takes Place--
First Consolidation
1.Equity
2.Document: the doc posted is also wrong
cu03 ordin share
cu03 min int
Here investment and differential is left out and moreover Amortization of goodwill is also left out inspite of doing the required settings.
Edited by: VAISHALI MODI on Sep 30, 2008 8:35 AM

Historical Goodwill Amortization

Hi Gurus,
we are planning to start a new consolidation environment.
One problem we have is related to legacy amortization, since we wolud like to perform automatic goodwill amortization.
We do not have an underlying SAP EC-CS or FI-LC, but we are speaking about the historical goodwill that was generated in the past and now must be considered as well since we are going to perform the first consolidation.
We found OSS Notes:
610218 - Legacy data transfer of manual goodwill entries
379665 - SAP consolidation: Legacy data transfer for goodwill entries
and would like some of you to share your own experience in this situation, with this notes.
Let's say this year (2009) is Y: as a consequence of First Consolidation BCS will calculate 1000 as Goodwill and we be finally depreciated up to year 2018.
Historical Goodwill emerging in Y-4 (2005) was 1000, to be depreciated in 10 years (100 for each year): so capitalided goodwill depreciation is 400.
So the questions are:
1. Goodwill will be depreciated up to year Y+6 (2013), considering past depreciation quotes?
2. Will these postings be considered in further operations (eg. divestiture or organizational changes)?
3. Are there any other ways to reach this result without AFD?
Thanks in advance for your cooperation.
GFV

Hi guys,
the question concerns technical aspects rather than functional or legal issues.
In other word the situation is the following:
I have Goodwill emerging in past years (let's say 2005, 2006, 2007, ...), that was amortized in Legacy system: so, in each year, we have some postings for each of the (past) Goodwill(s).
This year 2009 will be First Consolidation: users want amortizations related to past Goodwill(s) to be recorderd automatically by SEM-BCS, without manual intervention
So the question are:
1. Can this be requirement be satisfied with standard functionalities?
2. Will Goodwill AFD manually recorded for the past years be considered within First Consolidation?
As per my comprehension Dan says this requirement can be satisfied.
Thanks for your cooperation.
GFV

Amortization of negative goodwill

HI,
I need to configure the system in such a way that the positive GW (FS Item 2710) will be amortizated on a 5 years time but the negative GW (1280 FSI) it is not to be amortizated.
How should I configure the C/I - System utilization? I need to choose between one/several of the following choices:
1- Extraord.Amortization of Neg. Goodwill? or
2- Ordinary Amortization of Negative Goodwill? or
3- Direct Elimination of Negative Goodwill? or
4- Periodic Reduction of Negative Goodwill?
Thanks!

Hello all
Accumulated amortization of negative good' has not been maintained and system is generationg error message during COI process execution.
does any one know about what kind of item - especially BS Item whether it is ASSET or Equity
I beleive it should be EQUITY because, system hinting that DEFINE ITEM need to be assigned at MINORITY INTEREST ITEMS
EQUITY - MINORITY ITEM
it is pointing towards GLOBAL GOODWILL : Offsetting item for your reference purpose and appreciated your input
>>> Still I am looking expert advice >>>>>
appreciated any comments
thx

Excise duties for tooling amortization

Dear All,
Our customer paid the tooling amortization amount initially.
We used to send the seperate invoice for this tooling amount.
Here a doubt arises.
For this scenario, do we have excise values (BED, ECS, SECESS)?
Could someone confirm?
Regards,
Mullairaja

As per Central Excise regulations, if you are adding any tool cost over and above the selling rate, that should be identified clearly. This means, if you add the tool cost over selling rate, a text should flow in billing document stating "An amount of xxxxxxx is recovered as a tool cost.
If you show the amount separately as I said earlier by way of a condition type, your ABAPer's job is easy by fetching that condition type value in output.
Nevertheless, you add the tool cost or show separately, it should be accounted and showed to Excise authorities clearly.
Better ask the client to check with their Excise Range Office and sought their opinion.
thanks
G. Lakshmipathi

I bought my iphone from a goodwill and i tried to activate and it's red flagged or on some kind of hot sheet,but there's no information,so the sprint store service personnel said that i'm sol,so how do i remove red flag or activate my iphone,goodwill has

I BOUGHT MY IPHONE AT A GOODWILL STORE AND I CAN'T ACTIVATE OR RETURN IT HOW DO I REMOVE THE RED FLAG OR GET IT REMOVED FROM HOT SHEET OR GET A REWARD OR SOME THING EVERY BODY IS SAYING THAT WHO EVER OWNED IT GOT A NEW IPHONE ?????????

You can't.
If the phone has been blocked because it has been reported as stolen or lost you've wasted your money.
Why would you buy something without checking it worked?

How to Handle Amortization Cost in TAXINN

Experts,
I have a business Case of Amortization Cost with TAXINN. I have mapped it upto some extent. Need Some help to conclude.
Created a condition type in M/06 - ZASS with
Cond. class    - A Discount or surcharge
Calculat.type - C Quantity
Cond.category - H Basic price
Added in normal pricing procedure M/08 - given a subtotal "6" for condition type ZASS & given "363" Routine in Alternative formula for condition base value. System is calculating the follwing results for Taxes :
Pricing     Condition      Description                           Value
Schema    Type
JRM0000     P000     Basic               95.00                    95.00
JRM0000     ZASS     Amortization                   5.00                     5.00
TAXINN     JMOP     Excise Duty          10%(95+5)           10.00
TAXINN     JSEP     Education Cess               2%                     0.20
TAXINN     JCV1     S.H.Education Cess           1%                     0.10
          SubTotal for VAT                         105.30
TAXINN     JVRD     VAT            4%(95100.20+0.10)        4.21
          Net Value                              109.51
Above is correct as far as Tax calculation is concern. Now When I post the Goods receipt I am getting :
RM Inventory - 100 (95+5)
GR & IR         - 100 (95+5)
I need it like :
RM Inventory - 95 DR
GR & IR         - 95 CR
Amortization Cost - 5 DR (If possible)
Suspense Account - 5 CR (Possible)
Need suggestion & advise.
Regards
Rohit Arora

Experts,
I have a business Case of Amortization Cost with TAXINN. I have mapped it upto some extent. Need Some help to conclude.
Created a condition type in M/06 - ZASS with
Cond. class - A Discount or surcharge
Calculat.type - C Quantity
Cond.category - H Basic price
Added in normal pricing procedure M/08 - given a subtotal "6" for condition type ZASS & given "363" Routine in Alternative formula for condition base value for JMOP in TAXINN. System is calculating the follwing results for Taxes :
Pricing Condition Description Value
Schema Type
JRM0000 P000 Basic 95.00 95.00
JRM0000 ZASS Amortization 5.00 5.00
TAXINN JMOP Excise Duty 10%(95+5) 10.00
TAXINN JSEP Education Cess 2% 0.20
TAXINN JCV1 S.H.Education Cess 1% 0.10
SubTotal for VAT 105.30
TAXINN JVRD VAT 4%(95100.20+0.10) 4.21
Net Value 109.51
Above is correct as far as Tax calculation is concern. Now When I post the Goods receipt I am getting :
RM Inventory - 100 (95+5)
GR & IR - 100 (95+5)
I need it like :
RM Inventory - 95 DR
GR & IR - 95 CR
Amortization Cost - 5 DR (If possible)
Suspense Account - 5 CR (Possible)
Need suggestion & advise.
Regards
Rohit Arora

Customer Care and some goodwill wanted please

Basically, my parents were a victim of last Novembers Cumbrian floods and have been in a caravan since then whilst the repairs are ongoing. They are in their 70s and 80s.
Whilst flooded out they have been unable to physically connect to their BT broadband package due to
1. no electric in the flooded property and
2. various other diverse factors too complex to explain.
At the time of the floods they were about 8 months into an 18 month BB contract. The 18 months is up in October.
I have been in touch with Billing twice (on their behalf) with a suggestion that the BB is "suspended" until they get back in, after which it will resume.
However, the operatives I have talked to have their standard procedures, and if we want to, we can claim our £xx per month BB costs off the insurance.
In the grand scheme of things, £xx is a very small amount, and making this extra claim seems petty, as it is.
However, it is irking that we are paying for a service and due to circumstances beyond our control, we are getting nothing for it. Obviously this is not BTs fault - they are providing the service, it's just that we are unable to take advantage of it.
They phoned yesterday and put the £25 BB disconnection process into action.
I'm now looking for someone at BT with a sense of compassion
It would be really nice if someone at BT has the power and could say, OK, we've checked the records and we can see they haven't logged in since 20 November 09 and what we'll do is give you an appropriate amount of time on Broadband without charge, just as a gesture of GOODWILL, seeing as how BT like to purport themselves as a "CARING" company, and how we would like you to continue with us when your extended usage period ends.
I hope I find such a BT person here on these BT Care forums.
Any further information you require, especially the customer concerned, please let me know and I will supply.
Thank you for reading.

Hi Flooded_Out,
As you said yourself these circumstances are really beyond BT's control. Its not really a matter of compassion or customer care but of practicality. Insurance exists for reasons such this.
BT use our Customer Guarantee Scheme to ensure that any credits applied to accounts are given out when required and the conditions are applied equally to all our customers. Whilst I sympathise with your parents position I wont be able to offer a refund.
Sorry about that. However, personally, if I was entitled to money under an insurance scheme, no matter how small the amount, I would certainly claim and would advise you do the same
Cheers
Craig
BTCare Community Mod
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Forgot to create Goodwill asset during asset migration

Hi
In the migration process ,w eforgot to create a goodwill as an asset in asset accounting,but we migrated the balances into the respective GL accounts
now we need to create this asset because for local balances we have to post the depreciation
please kinldy advice
thanks
jvn

1. Upload it by using AS91
2. Rest your Asset Reconciliation Accounts to Non-Reconciliation Accounts OAMK
3. Post Journal Vourches in FI thorugh F-02 (Make sure that balances in Step1 and Step3 are matching by asset class wise)
4. Again reset back the asset reconciliation accounts (Refer Step 2)
Regards,
Ravi

Extraordinary Amortization of Goodwill

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