Penjelasan AKL 1 Pert. 7

Finance-Focused Summary (Consolidation / Equity Method Valuation & Amortization)

Key Topics

• Equity method consolidation and purchase price allocation (PPA) under a 100% vs NCI (non-controlling interest) ownership framework.
• Determining whether subsidiary net assets are overstated/understated versus fair value, then recognizing the “excess value” (i.e., the difference from consolidation) and amortizing it across identifiable assets:
  • Inventory
  • Land/Buildings
  • Equipment
  • Potentially goodwill
• Consolidation elimination entries for:
  • Intra-group transactions, such as intercompany investments and dividends
  • Duplicate effects on income and retained earnings
• Performance metrics referenced: net profit, consolidated net income, and retained earnings.

Ownership / Valuation Framework

• Ownership split:
  • Parent: 90%
  • NCI: 10%
• Fair value vs book value logic (“E” logic referenced):
  • Understated (book < fair) → positive equity-method / score impact
  • Overstated (book > fair) → negative impact
• Example “E scale” described:
  • 90% corresponds to 360
  • 100% corresponds to 400
  • (Used later in allocation-style calculations)

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Explicit Amounts and Figures (Mostly IDR “Rp”)

Equity Method Income / Net Profit Split

• Subsidiary net profit referenced: Rp 60 million
• Parent share (90%): Rp 54 million
• NCI share (10%): Rp 6 million
• Total dividend mentioned: Rp 20 million
  • Parent dividend share (90%): Rp 18 million
  • NCI dividend share (10%): Rp 2 million

Borrowing / Unrecorded Item

• Subsidiary borrowed from parent: Rp 20 million
• Issue described: the parent/subsidiary did not record the related check, requiring consolidation-side recording/elimination adjustments.

Purchase Price Allocation (“Excess Value”)

• “Excess value” / access value discussed:
  • Identified difference: 150
  • Later tied to goodwill and amortization
• Another difference later:
  • “not balanced short by 40”
  • Statement notes NCI 10% = 0 million (as stated)
• Assets singled out for allocation/amortization:
  • Inventory
  • Buildings (useful life 25 years)
  • Equipment (useful life 5 years)
  • Goodwill appears where remaining differences are not allocated to identifiable assets

Amortization / Annual Expense Calculations

• Buildings amortization example

  • Building value base shown: Rp 80 million
  • Useful life: 25 years
  • Amortization recorded: Rp 3,200
  • Formula described: building value ÷ 25
  • Later journal logic applies parent share (e.g., 90% and mention of Rp 2,800)

• Equipment adjustment/amortization example

  • Useful life: 5 years
  • Parent share leads to an amortization expense amount cited as Rp 4 million
  • Later flow includes another calculation result: Rp 5,720
  • Equipment is described as initially overstated, affecting whether amortization is added/subtracted in consolidation elimination logic.

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Consolidated Results

• Consolidated net income stated: Rp 155,720
• Ending retained earnings stated after dividend deduction: Rp 175,720
  • Explained as: retained earnings + net income − dividends
• Balance sheet totals:
  • Total assets described as 1.98 (subtitles appear truncated/scaled)
• NCI movement:
  • NCI increased from 40 to 3.80
  • Text formatting suggests Rp 3.80 million
• Investment account reconciliation:
  • “Investment in subsidiary (investment in S)” discussed around Rp 387.720
  • Later shown to reconcile to zero after elimination/model proof steps
  • Logic noted: “Investment in S is debited, decreases, then increases again” due to dividend/income elimination and amortization effects.

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Step-by-Step Methodology Framework (Consolidation + PPA + Elimination)

1. Identify valuation differences (fair value vs book value) for subsidiary net assets

   • If book < fair → treat as understatements (positive effect)
   • If book > fair → treat as overstatements (negative effect)

2. Compute equity method income and split between parent vs NCI

   • Parent income = subsidiary net profit × 90%
   • NCI expense = subsidiary net profit × 10%

3. Record and eliminate intra-group dividends

   • Parent dividend received: dividend × 90% → elimination logic
   • NCI dividend received: dividend × 10% → NCI expense / ending NCI logic

4. Allocate excess value to identifiable assets / goodwill

   • Allocate the excess/deficit to inventory, buildings, equipment
   • Remaining difference → goodwill

5. Amortize allocated fair value adjustments

   • Inventory: treated as COGS upon a sale assumption
   • Buildings: amortize over 25 years (annual = value ÷ 25)
   • Equipment: amortize over 5 years (annual = value ÷ 5)
   • Whether amortization is added/subtracted depends on whether the original adjustment was from overstatement vs understatement

6. Prepare consolidation elimination journal entries

   • Eliminate duplicated investment balances and equity portions
   • Eliminate intra-affiliate dividends and related intra-group effects

7. Validate consolidation “equations”

   • Ensure consolidated income and balance sheet align
   • Confirm income-from-subsidiary vs amortization-linked elimination yields the same consolidated results
   • Example confusion resolved by noting that prior amortization journals reduce the reported income effect

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Cautions / Recommendations

• No direct “buy/sell” recommendations.
• Implied caution:
  • If computed figures (e.g., income from subsidiary) do not match after amortization/elimination, it indicates consolidation journal entries are incorrect.

“If it turns out to be different… then it will be balanced later… if it’s different, it means the journal is wrong.”

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Disclosures / Disclaimers

• No explicit “not financial advice” disclaimer appears in the provided subtitles.

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Presenters / Sources Mentioned

• Participants named during questions:
  • Armansyah
  • Jenny Amanda
• No clearly identified instructor/publisher/source beyond these participant names.