About the equity consolidation method

Sage Intacct Advanced Ownership Consolidation supports the equity consolidation method in ownership structures. Use the equity consolidation method to automatically record a subsidiary's ownership net income to the parent entity or entities based on ownership percentage.

Intacct equity consolidation method does the following: 

  • Automates the recording of subsidiary income to a user-defined book for the parent entity or entities.
  • Ensures ownership transparency by recording and tracking changes by period.
  • Supports subsidiary rollup to multiple parents with multiple rollup levels.

Intacct uses the equity consolidation method to post equity entries to parent entities E400 and E100. Intacct adds the equity entries to the parent entity's net income.

Key benefits

Equity consolidation method provides the following key benefits:

  • Ownership structures that reflect a more comprehensive view of percentage ownership of entities, enabling the recording and tracking of changes by accounting period.
  • Subsidiary entities that roll up to multiple parent entities, up to 100% ownership, with inclusion in multiple rollup levels.
  • Uses the new affiliate entity dimension to auto-tag new equity consolidation entries on parent entities, driving greater flexibility and accuracy in financial reporting. Enable the affiliate entity dimension to benefit from auto-tagging.
  • The equity consolidation method applied to a given entity and the percentage owned is reflected in the map view of ownership structures.

How it works

Using equity consolidation method, Intacct automatically records the subsidiary’s net income to the parent entity.

Intacct equity consolidation method works as follows:

  1. Intacct auto-generates equity entries and writes these entries to the user-defined book for the parent entity.
  2. Then, Intacct consolidates the equity entries that it writes to the parent's user-defined book.
  3. If using the affiliate entity dimension, Intacct tags the subsidiary source entity with the affiliate entity dimension.

By tagging subsidiary source entity entries with the affiliate entity dimension, you benefit from more informative reporting on your consolidation.

How to use equity consolidation method

  1. Create a user-defined book. Intacct automatically records ownership structure equity entries to the user-defined book.
  2. Select the user-defined book in the ownership structure. In a new or existing ownership structure, select the user-defined book you created.
  3. Select equity method and percent ownership. Select equity consolidation method and percent ownership for the relevant subsidiary entities.
  4. Specify accounts. For each subsidiary entity that uses equity method, select the following accounts: 
    • Investment income account. This is a balance sheet (non-closing) account.
    • Subsidiary revenue account. This is an income statement (closing) account.
  5. Activate and run. Activate the ownership structure and run the consolidation for the period.

You can run a General Ledger report on the user-defined book to view the equity method entries recorded during consolidation.

Regional availability

Equity consolidation method is available to customers with a subscription to Advanced Ownership Consolidation in the following regions:

  • Australia

  • Canada

  • South Africa

  • United Kingdom

  • United States