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Administrator Guide
Last Updated: 2024-09-20
Set Up for Deriving Noncontrolling Interest

Set Up for Deriving Noncontrolling Interest

  • Define elimination rules for investment in subsidiary and subsidiary equity for an account set.
  • Select a
    Consolidating Parent Company
     on the
    Edit Consolidation Details
     task.
  • Security:
    Set Up: Consolidation
     in the Financial Accounting functional area.
Set up noncontrolling interest (NCI) for derived frameworks.
Workday recommends that you persist NCI. If you're new to Workday, you don't have the option to derive NCI.
  1. Access the
    Maintain Elimination Rules
     task.
  2. Select the
    Account Set
     for which you’re defining elimination rules.
    Create 1 or more elimination rules for the account set.
  3. Access the
    Investment in Subsidiary/Subsidiary Equity (To Be Retired)
     tab.
    As you complete this tab, consider:
    Option Description
    NCI Source Ledger Account Summaries
    Select the ledger accounts or ledger account summaries of the subsidiaries to calculate the equity portion of the NCI.
    Workday recommends that you:
    • Select the same accounts as in the
      Subsidiary Equity Ledger Accounts/Summaries
       tab.
    • Don’t include accounts that are in year-end closing rules.
    • Enter a value even if you don't have any NCI activity, to ensure best practice.
    NCI Portion of Equity
    Select the ledger account that you want to record the NCI derived from the
    NCI Source Ledger Accounts/Summaries
     accounts.
    Workday recommends that you enter a value even if you don't have any NCI activity.
  4. Access the
    Noncontrolling Interest Activity
     tab.
    As you complete this tab, consider:
    Option Description
    Direct Ownership Only (Always Select)
    This functionality isn’t available when you derive NCI.
    NCI Source Ledger Accounts/Summaries
    Select the ledger account or ledger account summaries that you want to use for calculating NCI activity.
    To prevent double-counting, Workday recommends that when you select ledger account summaries for parent companies in company hierarchies, you:
    • Exclude the earnings in subsidiary accounts in the parent companies from the ledger account summaries.
    • Create a separate ledger account summary for the earnings in subsidiary accounts.
    NCI Attribution Method
    Select either the
    Claim on Assets %
     or
    Ownership %
     as the method for calculating NCI activity. To change the percentages, select
    Edit Company Ownership Details
     from the related actions menu of the subsidiary company.
    NCI Target Ledger Account
    Select the ledger account that you want to record NCI eliminations to that offsets the NCI equity account.
    Prior Year Retained Earnings Ledger Account
    Select the subsidiary retained earnings account you want to use for displaying prior year NCI retained earnings.
    Ownership Change Adjustment Account
    Select 1 ledger account.
    If an ownership change results in an NCI equity change, Workday derives the current year offset to the NCI equity change and will post to the selected ledger account.
    If you don't select an ownership change adjustment account and there's an NCI equity change within the current year, the consolidated trial balance will be unbalanced by the offset amount.
    NCI Offset Ledger Account
    Define the NCI offsetting ledger account that you want to use for balancing NCI target ledger accounts.
    Select the same account you defined in the
    NCI Portion of Equity
     field on the
    Investment in Subsidiary Ledger Accounts/Summaries
     tab.
Workday uses the rules to calculate NCI activity entries and related equity pickup results.
To view NCI activity entries, use the standard composite consolidated trial balance report.