Global Consolidations Overview

Corporations today rarely consist of a single corporate entity. The larger the organization, the more likely that it contains multiple entities. A large multinational corporation may have hundreds of subsidiaries in dozens of jurisdictions. In addition, large organizations frequently invest in other entities, including joint ventures and partnerships. The goal of consolidated financial statements is to present the results of operations and financial positions of multiple entities as if they conducted business as a single entity. Combining the individual account balances of a number of related legal entities provides a more realistic financial picture of the total economic entity.

Some of the complex issues faced when consolidating are:

• The subsidiary business units use a variety of general ledger packages on multiple platforms:

  • The general ledgers often use different charts of accounts, different base currencies, or different accounting calendars.

  • The general ledgers do not have information at the same level of detail.

  • Information is moved multiple times to arrive at needed reports.

  • Combining the ledgers into a single system that can be used to generate consolidated information is very difficult.

• The cost to centralize the information necessary for consolidations is high:

  • In many cases, a large amount of the work is manual or on spreadsheets.

  • It takes too long to complete consolidations.

  • It can be difficult or time-consuming to deliver reports.

• The reports required by management must present results in a multidimensional fashion.

PeopleSoft Global Consolidations enables you to perform consolidations on subsidiary ledgers from multiple sources by the dimension or ChartField of your choice—such as business unit, department, product, or operating unit—within the PeopleSoft Enterprise Performance Management framework. It presents the results of operations and financial positions of multiple entities as if they had conducted business as a single entity and enables you to tie together heterogeneous financial and accounting systems into one well organized, controlled, and intuitive consolidated reporting system. It automates the processes of matching and eliminating intercompany transactions, accounting for non-controlling interest, and equitizing subsidiary income.

PeopleSoft Global Consolidations meets the business requirements for both management and statutory reporting systems, and is flexible enough to accommodate both industry-specific and geography-specific reporting requirements.

Because PeopleSoft Global Consolidations is built within the framework of the PeopleSoft Enterprise Performance Management database, it provides a centralized single source of information, enables scalability, and utilizes delivered data maps to load ledger data. You can view the status of each phase of consolidation processing, interactively navigate to the source ledger data, analyze trends, and inquire on ledger balances. Your business units can continue to use their current accounting systems, as you are able to bring in the data, map it to a consolidation ledger, then process eliminations and equitizations based on the business rules that you establish.

Because you can base consolidations on any ChartField or dimension, you can define multiple consolidation scenarios, depending on your specific reporting needs. For example, the way in which you report to the Internal Revenue Service or your stockholders may be different from the way in which you report to various management groups. PeopleSoft Global Consolidations enables you to generate consolidated statements for any combination of business units so that their financial statements appear as if business had been conducted as one entity.