The Consolidation Process
The typical consolidation process includes eight steps, illustrated in Figure 1 - 3:
1. Define Consolidation Charts of Accounts: Carefully planning your parent and subsidiary charts of accounts can help simplify the consolidation process. We recommend that you review the suggestions presented earlier in this chapter when you are designing and setting up your parent and subsidiary charts of accounts and sets of books.
2. Map Consolidation Data: The first step in an actual consolidation is to define how your subsidiary accounts map to your parent accounts. The mapping determines how your subsidiary balances roll up into the consolidated ledger.
3. Prepare Consolidation Data: You prepare your subsidiary balances before you transfer them to the parent. Data preparation involves revaluing balances and translating foreign currency amounts.
Note: If you use Multiple Reporting Currencies, you may be able to bypass the translation step by consolidating directly from a subsidiary's reporting set of books to your parent set of books. See: Preparing Subsidiary Data
4. Transfer Consolidation Data: Once your subsidiary data has been prepared, you transfer it to the parent, where it will be consolidated.
Figure 1 - 3.
Consolidation Process
5. Post Consolidation Data: After gathering all of your subsidiaries' consolidation data, you combine it with your parent's data by posting the consolidation journals that are created in the parent set of books when the subsidiary data is transferred.
6. Create Eliminating Entries: Once your parent and subsidiary data has been combined, you can enter your eliminating journal entries.
7. Report on Consolidated Balances: Your balances are now consolidated and ready for reporting.
8. Analyze Consolidated Data: Directly link your consolidated data to multi-dimensional online analytical processing (OLAP) tools. You can review and analyze your consolidated reports, and prepare operational and financial analyses for your management team.
What Can You Consolidate?
With GCS you can consolidate any business dimension at any level of detail from any point of view:
Chart of Accounts: Map any subsidiary chart of accounts structure into your consolidated parent, regardless of differences in the account structure.
Level of Detail: Consolidate detail transactions, detail balances, or summary balances.
Balance Type: Consolidate actual, average, translated, budget, and statistical balances.
Calendar: Use any accounting calendar for the parent set of books into which you consolidate your subsidiaries.
Currency: Maintain subsidiary sets of books in a different currency than your parent. Simply revalue and translate balances as needed before transferring consolidation data to your parent.
Consolidation Workbench
Consolidation Workbench provides a central point of control for consolidating an unlimited number of subsidiaries to your parent, while keeping you informed about each subsidiary's consolidation status.
See Also
Consolidation Workbench
Performing Multi-company Accounting in General Ledger
Accounting for Multiple Companies with Multiple Sets of Books
Multiple Reporting Currencies Overview
