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Administrator Guide
Last Updated: 2024-09-20
Set Up Equity Pickup Elimination Rules in AP&C

Set Up Equity Pickup Elimination Rules in AP&C

In Adaptive Planning and Consolidation (AP&C), you can define rules for eliminating equity pickup earnings for the investor and investee companies when you consolidate subsidiaries using the equity method of accounting. For each equity pickup rule, you can define:
  • Default ledger accounts.
  • Ledger accounts for 1 or more companies with their own set of accounts.
Workday supports equity pickup on all subsidiary investments regardless of ownership percent.
Equity pickup elimination rules work in conjunction with elimination rules for intercompany or interworktag and noncontrolling interest.
  1. Access the
    Maintain Elimination Rules
    Equity Pickup
     tab.
  2. As you complete the
    Equity Pickup
     tab, consider:
    Option Description
    Rule Name
    You can't use a rule name more than once.
    Record in Subsidiary Base Currency
    Select to record equity pickup in the base currency of the subsidiary. When you select this check box, you can revalue investments as configured in your revaluation rules.
    When you don't select this check box, Workday calculates the equity pickup results in the ledger (base) currency of the parent company or companies. This results in the revaluation of your investment account at historical rates, such as the rates that applied at the time of recording.
    Journal Source
    Select only 1 journal source.
    You can define journal sources on the
    Maintain Journal Sources
     task.
    Currency Rate Type
    Select to override the default currency rate types Workday defines at the company or tenant level.
    Source Ledger Accounts/Summaries
    Select 1 or more default ledger accounts or ledger account summaries that you want to use to derive equity pickup results. Each account must be unique, and typically comprises the net income of the subsidiary.
    You can create more than 1 row for each ledger account or ledger account summary entry.
    Example: Select 1 source ledger account for net income and another for dividends.
    If you have multiple levels of ownership, ensure that you include the profit/loss account so that your results flow to the various levels of ownership in the hierarchy. Do this also if you configure the
    Ownership Change Adjustment Account
     option.
    Investment Account
    Select a default ledger account to record the change to the parent investment in the subsidiary.
    Select an account that is different to the provision account to avoid processing errors.
    To avoid processing errors, the selected account:
    • Must be zero or debit balance by intercompany affiliate before equity pickup is run each period.
    • Can't be the same account as the
      Provision Account
      .
    Profit/Loss Account
    Select a default ledger account to record the change to the parent equity income or loss in the subsidiary.
    The equity pickup process creates duplicate results if you calculate equity pickup using a different rule with the same:
    • Company or Company Hierarchy.
    • Fiscal Period.
    • Source Ledger Accounts.
    Provision Account
    (Optional) Select a provision account to record equity pickup losses for the parent company. When you don't select a provision account, Workday tracks losses but won't record them to any account.
    Select a provision account when you select a ledger account from the
    Ownership Change Adjustment Account
     option.
    To avoid processing errors, the selected account:
    • Must be zero or credit balance by intercompany affiliate before equity pickup is run each period.
    • Can't be the same as the
      Investment Account
      .
    Ownership Change Adjustment Account
    (Optional) Select a ledger account to record the change in ownership from prior period to current period.
    If you don't select an account, Workday won't record ownership changes.
    Workday records the offset on adjustments to the profit/loss account.
    Worktags
    (Optional) Select 1 or more worktags, which can include balancing worktags, that you want to associate with target journal lines.
  3. (Optional) In the
    Company Overrides
     grid, configure an equity pickup rule for 1 or more investor companies when each company has different investment, profit and loss, and provision accounts.
    Ledger accounts and worktags that you specify on the grid override default ledger account and worktag values for investor companies.
This example illustrates an elimination rule for equity pickup:
Option
Description
Rule Name
Equity Pickup with Provision
Record in Subsidiary Base Currency
Select.
Journal Source
Equity Pickup
Currency Rate Type
Leave blank.
Source Ledger Accounts/Summaries
Standard: Income Statement Accounts
Investment Account
1930:Investment in Joint Ventures
Profit/Loss Account
8000:Earnings in Joint Ventures
Provision Account
2800:Provision for Loss in Joint Ventures
Ownership Change Adjustment Account
Leave blank.
In this example, the
Record in Subsidiary Base Currency
 check box is selected so that investments can be revalued using revaluation rules.
The
Investment Account
 is the investment in subsidiary account, which is the target account for equity pickup of subsidiary earnings. You could also set up and use an
Investment in Subsidiary - Earnings
account to segregate cumulative earnings from the original investment balance and provide more visibility into the investment accounts.
The
Profit/Loss Account
 for the net income rule is the earnings or loss in subsidiary account on the income statement. For other comprehensive income (OCI) rules, select the same account as the
Source Ledger Accounts/Summaries
 to effectively record the parent's portion of the subsidiary's OCI into the same account on the parent's ledger.
Use the
Equity Pickup
 task to calculate equity pickup results.