If a consolidation unit is proportionately included in a consolidation group, and if the proportion changes, then the annual net income that is disclosed in the consolidation group prior to the proportion change is not permitted to change. For this reason, the apportionment program multiplies the annual net income, which was incurred prior to the proportion change, with the proportion change. The result is then reclassified to the 'Annual Net Income Prior to Proportion Change' item. The consolidation of investments then eliminates this balance using the same value with the opposite debit/credit sign, posting to the same item.
Procedure
Enter an item number for the annual net income prior to proportion change. This item belongs to the appropriation of retained earnings.