Configuring Intercompany Dividend Elimination - IBM Cognos Controller 8x

Transcription

1 Guideline Configuring Intercompany Dividend Elimination - IBM Cognos Product(s): Controller 8.3 or higher Area of Interest: Financial Management

2 2 Copyright and Trademarks Licensed Materials - Property of IBM. Copyright IBM Corp IBM, the IBM logo, and Cognos are trademarks or registered trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at While every attempt has been made to ensure that the information in this document is accurate and complete, some typographical errors or technical inaccuracies may exist. IBM does not accept responsibility for any kind of loss resulting from the use of information contained in this document. The information contained in this document is subject to change without notice. This document is maintained by the Best Practices, Product and Technology team. You can send comments, suggestions, and additions to cscogpp@ca.ibm.com.

3 3 Contents 1 INTRODUCTION PURPOSE APPLICABILITY EXCLUSIONS AND EXCEPTIONS ELIMINATION OF INTERCOMPANY DIVIDENDS DEFINITION GENERAL LEDGER ACCOUNTS... 3 INTERCOMPANY DIVIDEND INCOME/PAYABLE AUTOMATIC JOURNAL INTERCOMPANY BALANCES VERIFYING THE DIVIDEND INC/PAYABLE ELIMINATION ELIMINATION OF INTERCOMPANY DIVIDENDS/MINORITY INTEREST ADJUSTMENT DIVIDENDS AND MINORITY INTEREST AUTOMATIC JOURNAL OTHER REFERENCES Introduction 1.1 Purpose This document provides guidelines to setting up and eliminating intercompany dividends and payable. 1.2 Applicability IBM Cognos Controller 8.3 or higher. 1.3 Exclusions and Exceptions There are no known exceptions and exclusions at the time this document was created. 2 Elimination of Intercompany Dividends 2.1 Definition Sometimes parent and subsidiary issue dividends to each other. Since, dividend is deemed to be intercompany it needs to be eliminated when consolidated financial statements are prepared. 2.2 General Ledger Accounts The Dividend Payable and Dividend Income accounts need to be identify with intercompany code to ensure the accounts accepts details from the counter company.

4 4 You have the option to select Intercompany without transaction currency (I) or Intercompany with Transaction Currency (J) 2.3 Intercompany dividend Income/Payable The counter company information must be identified to isolate the intercompany transaction as part of the data import into IBM Cognos Controller. In this demonstration, Company Globe Germany and Globe Belgium are used to illustrate the intercompany dividend. Globe Germany pays a dividend to Globe Belgium in the amount of 10,000. There is dividend account on the balance sheet and dividend income account on the profit and loss statement. The dividend needs to be eliminated as if it never happened.

5 5 2.4 Automatic Journal Intercompany Balances An Automatic Journal needs to be defined in order to eliminate the dividend. Create and then define an automatic journal called dividend pay/income. Define the Receivable/Income account - in this example the dividend income account must be entered into the fields. Define Payable/Expenses - in this example it would be the intercompany dividend account on the balance sheet. Define how you want to handle the differences. The differences can be entered as payable/receivable or charged to the income statement. Define the offset account or where the entry is to be cleared to on the balance sheet. Select the advance screen. There are options for on-line matching and counter dimensions. It is good practice to select on-line matching. The counter dimensions come into play if you are using dimensions. It should be noted that you are only allowed one dimension to charge the amount too. 2.5 Verifying the Dividend Inc/Payable elimination To verify the actual elimination was done correctly you can run a trial balance with drill down to check the entry.

6 6 You can also run the journal across reports as well to verify the actual transaction was completed correctly. 3 Elimination of Intercompany Dividends/Minority Interest adjustment 3.1 Dividends and Minority Interest Sometimes companies want to eliminate 100% of dividend and then show the dividend impact on minority interest. There is another option available if this is a requirement. 3.2 Automatic Journal Set up a new automatic journal.

7 7 from account 1801 (the P/L account for Dividends) To account change is the B/S account for retained earnings. To account change is the B/S account for this year results. To account is the B/S account for the dividends.

8 8 4 Other References There is additional documentation available around intercompany. Please refer to the below documents: Intercompany elimination process when counter company is unknown or higher.doc Intercompany eliminations with details in a separate data load_controller.doc Interco balances import with GL account as Counter Company.doc Guidelines to configuring Intercompany Profit Controller 8X.doc