US-GAAP Vs IFRS in Consolidation

[Former Member]

Dear All,

I need a clarification on US-GAAP and IFRS consolidation.

For US-GAAP direct share method

For IFRS Group share method

What is the functional reason for the same and if any company want to do USGAAP and IFRS consolidation. How in BPC system this will be handled ??

Regards,

Raja

[Former Member · Accepted solution]

Hi Raja,

by direct share method and group share method you are referencing the calculation options in the ownership manager. These are done by scope (i.e. by element in your group type dimension). So, to have US-GAAP and IFRS next to each other, simply use two scopes. That way you can have different methods/percentages for the consolidation.

BR,

Arnold

[Former Member · Accepted solution]

Dear Arnold,

Thanks for the reply. I understood that its calculation option in the ownership manager by direct or group share method. But what is the functional reason IFRS is suggesting Group share method calculation and US-GAAP suggests Direct share method.

Your Answer - That way you can have different methods/percentages for the consolidation. - Different percentages is ok...but how come different methods ?? you mean calculation method ??

[former_member186338 · Accepted solution]

"But what is the functional reason IFRS is suggesting Group share method calculation and US-GAAP suggests Direct share method." - I recommend you to talk with finance people about the difference in the rules between IFRS and USGAAP....

[Former Member · Accepted solution]

Hello Vadim,

Thanks, Expected some functional BPC experts/consultants reply.

[Former Member · Accepted solution]

Hi Raja,

when you have different percentages you can have different methods to go with those. For example, I think a 30% investment could be consolidated at-equity in one set and as a joint venture in the other set of rules.

Best ask an auditor to clarify questions like this.

However, you can also use different scopes to differentiate between management and legal consolidation and in such a scenario you might often get differences. In management we often include all entities as fully consolidated subsidiaries and show minority interest, even when we only have an investment of 20%.

BR,

Arnold