Podcast
Questions and Answers
What does equity pick-up (EPU) specifically require for parent units?
What does equity pick-up (EPU) specifically require for parent units?
- Development of new accounting policies.
- Annual audits of all subsidiaries.
- Standalone financial statements reporting. (correct)
- Separate tax filings for direct subsidiaries.
Which statement is true regarding the change of equity after acquisition?
Which statement is true regarding the change of equity after acquisition?
- It must be noted only in subsidiary books.
- It only applies to indirect subsidiaries.
- It can be ignored if the parent does not consolidate.
- It must be recorded in the parent unit books. (correct)
Which countries require equity pick-up as an essential step for consolidation?
Which countries require equity pick-up as an essential step for consolidation?
- Japan and Canada.
- China and Brazil. (correct)
- Australia and India.
- Germany and France.
What is one of the steps included in the equity pick-up process flow for SAP S/4HANA Finance?
What is one of the steps included in the equity pick-up process flow for SAP S/4HANA Finance?
What happens to EPU entries during group reporting?
What happens to EPU entries during group reporting?
Flashcards
Equity Pick-Up (EPU)
Equity Pick-Up (EPU)
A regulatory requirement in certain countries, such as China and Brazil, where parent units report standalone financial statements.
Reevaluate Investment
Reevaluate Investment
The process of adjusting the parent company's investment to reflect the change in equity in its subsidiaries after acquisition.
Change of Equity after Acquisition
Change of Equity after Acquisition
Includes reported income, changes in reserves, and other comprehensive income (OCI) attributable to direct subsidiaries.
Step-By-Step Calculation
Step-By-Step Calculation
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EPU in Consolidation
EPU in Consolidation
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Study Notes
Equity Pick-Up (EPU) Overview
- EPU is a regulatory requirement in some countries (e.g., China, Brazil) for reporting standalone financial statements of parent units.
- EPU recalculates the parent company's investment to reflect equity changes post-acquisition.
- Changes in equity, including income and reserves (or OCI) from direct subsidiaries, are reflected in parent unit books.
- This includes the "pick-up" from the parent company's direct subsidiaries (a hierarchical step-by-step process).
- In the USA, financial services and some regulated industries may be required to perform EPU based on regulator requests
EPU Process in SAP S/4HANA
- Data collection involves general ledger (G/L) data, uploads, mappings/imports, and manual data entry.
- Data population includes direct share percentages, net income calculations, and adjustments for posting level 10.
- The system calculates EPU.
- The system generates an Excel file for posting EPU entries to group reports.
- EPU entries in group reports use a different document type to prevent consolidation.
- Reports for group financial data include EPU entries but exclude EPU reversal entries.
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Description
This quiz explores the Equity Pick-Up (EPU) process and its regulatory implications in different countries, focusing on financial reporting for parent companies. You'll also learn how EPU is integrated within the SAP S/4HANA system, including data collection and calculations involved. Test your understanding of key concepts and processes related to EPU.
