Ownership and NCI · Track 4 · Tutorial 3 of 3
Adjust the equity method by journal
BrizoConsol’s equity method starts from the associate’s own profit, dividends and OCI. Some adjustments need facts its books don’t hold: what the group paid for its assets, what the group sold it, whether the investment is impaired. You post those as journals of type JV / Associate, against the associate they belong to.
1Know which adjustments are yours
| Adjustment | Why it needs a journal |
|---|---|
| Extra depreciation on fair value uplifts | When the group bought its stake, some of Company G’s assets were worth more than their book value. Company G depreciates the book value; the group’s share of profit should bear depreciation on the fair value. |
| Unrealised profit | When a group company sells goods to Company G, or Company G to the group, the group’s share of the profit on goods still held isn’t earned yet. |
| Impairment | If the investment is worth less than it is carried at, the loss is the group’s judgement, not in Company G’s books. |
| Accounting policies | If Company G uses policies different from the group’s, its profit is adjusted to the group’s policies before the share is taken. |
| Income on a purchase below fair value | If the group paid less than its share of Company G’s net assets at fair value, the difference is income in the period it bought the stake. |
Each adjusts the investment and the share of profit, or another line of profit and loss, by the group’s share only: 30% for Company G.
2Open a JV / Associate journal
- Open Ownership & Equity → JV / Associate and click Add Manual JV Journal, or open Adjustments → Consolidation Journals, click + Add a new journal entry and choose JV / Associate as the Journal Type.
- Choose Company G · JV / Associate as Related company. Every group company is listed, each with its relationship after its name, so check you have the associate.
- Enter the Date, a Journal ID and a Description that says why the entry exists.
The related company is what ties the journal to Company G: it is listed with Company G’s entries, and BrizoConsol won’t save a JV / Associate journal without one.
3Post the extra depreciation, every month
At the purchase in July 2026, Company G’s building was valued 100,000 above its book value, with 20 years of life left. The extra depreciation is 5,000 a year for the whole company; the group’s 30% is 1,500 a year, 125 a month.
- Tick Recurring journal, and choose Jul-2026 as Start Period and Jun-2027 as End Period. It is offered on a journal added from Consolidation Journals, not from Add Manual JV Journal.
- Debit 4130 Share of Profit of Associates 125, and credit 1700 Investment in Associates 125.
- Click Confirm. One entry is posted in each month from July to June.
Extend it, or add another, when the period ends. The share of profit then reads net of the extra depreciation, as the standards expect.
4Remove unrealised profit
In September, Company A sells goods to Company G for 50,000, at a profit of 10,000. At the end of September Company G still holds all of them. The group’s 30% of the profit, 3,000, isn’t earned yet.
- Add a JV / Associate journal for Company G, dated in September.
- Debit 4130 Share of Profit of Associates 3,000, and credit 1700 Investment in Associates 3,000.
When Company G sells the goods on, post the reverse in that month. For a sale the other way, from Company G to the group, the same 30% comes out of the share of profit, against the inventory the group holds instead of the investment, if that is your group’s policy.
5Post an impairment
At the year end, the impairment review values the group’s 30% at 310,000, against a carrying amount of 320,000.
- Add a JV / Associate journal for Company G, dated in December.
- Debit an impairment loss account in profit and loss 10,000, and credit 1700 Investment in Associates 10,000.
The impairment reduces the investment, and so the carrying amount BrizoConsol measures later losses against.
6Check the journals
- Open Ownership & Equity → JV / Associate for each month.
Check
Under Manual JV Journals, each journal is listed with Company G, and its Diff is 0.00. The Auto JV Journals above are unchanged: your journals adjust the equity method, they don’t replace it. On Month End Status, the JV / Associate journals are counted for the month.
Like other manual journals, these follow the period lock: a journal can’t be added to, changed in or deleted from a locked month.
7If something goes wrong
| What you see | What to do |
|---|---|
| CTA, NCI, and JV journals require a related subsidiary selection. | Choose Company G as Related company. |
| Company G is listed as Company G · Subsidiary | Its latest ownership record isn’t JV / Associate. Check its Share purchases and sales on the Ownership page. |
| Please provide at least one debit and one credit line with amount greater than zero. | Enter both lines with an amount. |
| Period locked | The month is locked. Ask whoever manages the lock, or date the journal in an open month. |
| The adjustment is 100% of the figure | Post only the group’s share: 30% for Company G. |
Want more detail? See the documentation