Equity Pickup Module

Equity Pickup is a method of re-evaluating the investments owned by a holding company, allowing the parent to realize changes in equity. This results in the holding company’s balance sheet showing the current value of the corresponding share in the equity of the subsidiary. Investments are normally shown at historical or acquisition cost. But an invested company has a value that can vary based on the profit and loss they are incurring. The Equity Pickup adjustment offsets the historical cost in local currency, showing the actual value of the equity owned. The Equity Pickup adjustment is not unlike the Equity method described in the “Ownership Module” section of this chapter.

You can calculate the adjustment by simply taking the direct ownership percentage multiplied by the equity of the entity owned and then subtract the investment in the parent. The administrator or users can enter the percentage of ownership into the Equity Pickup module. Once this information is in the system, you can calculate the adjustments. You could just use a regular account and build this into the rules without using the Equity Pickup module, but the module does some specific things to help. In fact, if you have a system older than Fusion when this was first available, you may not be using this feature. And you might be thinking, these rules are complicated enough, and if it works why open a can of worms? Well, there are some nice ad....