After switching to Group Reporting, many customers who previously used BCS find that some functionalities are no longer available in an automated and pre-supplied form, or are no longer available at all. One example of this is the scheduled amortization of goodwill.

According to Section 301 para. 3 sentence 1 HGB, the remaining difference must be recognized as goodwill under assets. § Section 253 para. 3 sentences 3 and 4 HGB stipulates that if the useful life of goodwill cannot be reliably estimated, it must be amortized over 10 years.

In BCS, goodwill can be amortized automatically via additional reporting data. Group reporting does not offer such a function, as it is structured in accordance with the IFRS accounting standard. In IFRS, goodwill is not amortized and is written down after the impairment test (IAS 36).

As part of our con-Lab within the Group Reporting Standard, we have designed a solution for automatic amortization by using reclassifications and validations. The capitalized and already depreciated difference is recorded on statistical items so that the depreciation process can be traced. A percentage rate for periodic or annual depreciation must be supplied manually. This means that goodwill can also be amortized over a shorter term in the event of subsequent capitalization. Goodwill can also continue to be amortized in the event of a system change to Group Reporting. Validate check rules if the amount has been fully amortized or if the amortization has eliminated too much.

On the whole, we can therefore say that amortization can be implemented largely automatically in Group Reporting, except for the delivery of the percentage rate. Our concept offers the necessary flexibility in the event of subsequent capitalization and sufficient traceability and validation in the amortization process.