23 Overview to Account Consolidations

This chapter contains these topics:

Section 23.1, "Objectives"
Section 23.2, "About Account Consolidations"

23.1 Objectives

To create consolidated account balances for a limited number of companies (low-volume)
To create consolidated account balances for all companies or a large number of companies (high-volume)

23.2 About Account Consolidations

Account consolidations enable you to group, or consolidate, business unit account balances for online viewing and reports. You can consolidate account balances for companies or organizational business unit structures.

Account consolidations consist of:

Working with low-volume consolidations
Working with high-volume consolidations

The method you choose depends on the availability of disk space.

23.2.1 What Are the Advantages and Disadvantages of Each Method?

Type of Consolidation	Advantages / Disadvantages
Low-Volume	Advantages: Is useful for consolidating small numbers of companies or business units. Includes "real-time" information for up-to-the-minute consolidations. Enables you to store criteria for future consolidations. Controls the calculation method for ledger comparison. For example, you can have the system subtract budgets from actuals to calculate budget variances or divide budgets by actuals to show a budget-to-actual ratio. A processing option determines the calculation method. Accesses the ledger for viewing detail for business units, down to the account level. Does not require additional disk space because the program does not create new records. Instead, it uses the existing account balance records. Enables you to use organization report structures for viewing a parent business unit and all child business units associated with that parent. Enables you to use a masked business unit to search for and view all business units that share a specific pattern. Enables you to consolidate balances based on multiple business unit category codes. Disadvantages: Provides viewing capabilities only (no hard copy). Causes increased processing time, based on the number of business units.
High-Volume	Advantages: Is useful for consolidating large balances and numbers of companies or business units. Enables results to be used in financial reporting. Allows batch mode for running consolidations overnight. Processing in batch mode is useful to consolidate a large number of business units or accounts, or both. Disadvantages: Does not recognize parent/child reporting structures. Requires additional disk space, because several programs add records to tables and build a new database that contains consolidation information (pseudo records). Prevents real-time access, due to batch mode. Requires you to refresh consolidation to update the consolidation with new account balance information.

Type of Consolidation

Advantages / Disadvantages

Low-Volume

Advantages:

Is useful for consolidating small numbers of companies or business units.
Includes "real-time" information for up-to-the-minute consolidations.
Enables you to store criteria for future consolidations.
Controls the calculation method for ledger comparison. For example, you can have the system subtract budgets from actuals to calculate budget variances or divide budgets by actuals to show a budget-to-actual ratio. A processing option determines the calculation method.
Accesses the ledger for viewing detail for business units, down to the account level.
Does not require additional disk space because the program does not create new records. Instead, it uses the existing account balance records.
Enables you to use organization report structures for viewing a parent business unit and all child business units associated with that parent.
Enables you to use a masked business unit to search for and view all business units that share a specific pattern.
Enables you to consolidate balances based on multiple business unit category codes.

Disadvantages:

Provides viewing capabilities only (no hard copy).
Causes increased processing time, based on the number of business units.

High-Volume

Advantages:

Is useful for consolidating large balances and numbers of companies or business units.
Enables results to be used in financial reporting.
Allows batch mode for running consolidations overnight. Processing in batch mode is useful to consolidate a large number of business units or accounts, or both.

Disadvantages:

Does not recognize parent/child reporting structures.
Requires additional disk space, because several programs add records to tables and build a new database that contains consolidation information (pseudo records).
Prevents real-time access, due to batch mode.
Requires you to refresh consolidation to update the consolidation with new account balance information.

23.2.2 What You Should Know About

Topic	Description
AAI items	Both methods use AAI items GLG6 (beginning revenue account) and GLG12 (ending income statement account) to distinguish between balance sheet and income statement accounts. When the system calculates cumulative balances, it adds the prior year-end cumulative balance to the year-to-date amount for accounts that are not income statement accounts.
Multi-Currency	You can consolidate business units only if they have the same currency. If they have different currencies, the resulting amounts are meaningless.