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Accounting for Multiple Companies with a Single Set of Books

You can maintain one set of books for multiple companies as long as the companies share the same account structure, accounting calendar, and functional currency. When setting up the account structure for your set of books, use the segment representing your companies as the balancing segment. This will ensure that each company is always in balance, which makes it easy for you to maintain and report on multiple companies as stand-alone entities, even when you maintain their accounting records in the same set of books.

You can also create summary accounts that maintain consolidated balances for faster reporting and online inquiry. For example, you can see consolidated cash balances, or non-exempt salaries across all companies, and so on.

If you set up your accounts to capture the appropriate information, you can then use the Financial Statement Generator (FSG) to report separately on different industries, foreign operations and export sales, and major customers in accordance with SFAS 14 (U.S.).

Additional Information: If you maintain your parent and all of its subsidiaries within one set of books and you do not have average balance processing enabled, you only need to read this section of the consolidation chapter. You do not need to use the Global Consolidation System to view and report on your consolidated financial information.

   To create a single set of books for multiple companies:

   To enter multi-company transactions:

   To report and inquire on consolidated balances:

Note: If you have average balance processing enabled and want to consolidate average balances, you must use the Global Consolidation System provided with General Ledger because you have to use separate sets of books.

If you use multiple Applications instances, discuss your consolidation needs with an Oracle consultant.

Creating Automatic Eliminating Entries

If you maintain multiple companies within one set of books, you can define automatic entries to eliminate intercompany receivables and payables, investments in subsidiaries, intercompany sales, and so on.

To expedite consolidations and enhance consolidation reporting, define a separate company for your eliminating entries. You can then post eliminating entries to this elimination company without needing to reverse them later. You can also prepare financial statements that clearly identify consolidating and eliminating amounts, making it easy to reconcile your consolidated balances.

If you define a separate company for your eliminating entries, be sure to include it as a child of your consolidated company.

   To define automatic eliminating entries:

Creating Consolidated Reports

If you maintain multiple companies within one set of books, you can use FSG to define and request consolidated financial statements using the consolidated parent company accounts. FSG will automatically print consolidated balances in your reports.

You can also use FSG to create consolidating reports -- a side-by-side listing of all your consolidating companies. You may find this useful when reconciling your subsidiaries' totals to the consolidated total. For example, a consolidating report might show your report line items down the left side, then present each subsidiary and your consolidated totals in separate columns:

  U.S.
Operations
U.K.
Operations
Japan
Operations
Eliminating
Entries
Consolidated
Total
Cash $ 1,250,000 $ 750,253 $ 1,345,253 - $ 3,345,506
Investments 2,725,000 1,152,750 856,253 350,425 4,383,578
Receivables 4,523,795 885,952 1,648,253 $ 25,000 7,033,000
Fixed Assets 24,354,253 2,425,253 8,152,425 854,125 34,077,806
. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Retained Earnings 115,895,452 12,752,200 22,452,887 1,758,665 149,341,874

   To create a consolidating report with the Financial Statement Generator:

See Also

Defining Sets of Books

Defining Summary Accounts

Defining Intercompany Accounts

Creating Recurring Journal Formula Batches

Overview of the Financial Statement Generator

Overview of Average Balance Processing

Designing Your Accounting Flexfield

Defining Segment Values


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