Introduction to the Consolidation Module

This module permits Transactions from "Daughter" Companies (e.g. subsidiary Companies) to be made visible to a "Mother" Company (the holding Company), so that consolidated reports can be produced quickly and easily. The module supports multi-level consolidation: Daughter Companies can have their own Daughters. Subsidiaries can be wholly or partially owned.

You will produce consolidated reports from the Mother Company. These reports will be constructed using information in the Mother and the Daughter Companies. This is done automatically: there is no need for you to transfer any Transactions from Daughter Companies to the Mother Company manually before producing a report. This means that the Mother and Daughter Companies must reside in the same database.

In some circumstances, the requirement to have the Mother and Daughter Companies in the same database might not be practical. If so, the module also contains a 'Consolidation' Export function, which can be used to export Transaction information from a Daughter Company to a text file. This text file can then be imported to the Mother Company.

The basic steps required to set up the Consolidation module are as follows:

  1. Enter all Companies to the Company register in the System module. Ensure each Company contains its own Chart of Accounts, Fiscal Years, VAT Codes, Nominal Ledger report definitions, Currencies and so on.

  2. In the Mother Company, complete the Daughter Companies setting in the Consolidation module. This setting should also be completed in any Daughter Companies that themselves have Daughters.

  3. In all Companies, complete the Consolidation Settings setting in the Consolidation module. This will determine the Currency that will be used in the consolidated reports.

  4. In any Daughter Company that is partially owned, enter a record in the Main Owner Percentage register. This will state on a percentage basis how much of the Daughter is owned by the Mother.

  5. When you produce a consolidated report, the balance of each Daughter Company Account is added to the balance of the Mother Company Account to which it has been linked. The final step is to establish this link in each Account record in each Daughter Company.

  6. In some circumstances, each Daughter Company will be a separate cost centre that will be invoiced when it uses resources belonging to another Daughter Company. These internal costs and income should be eliminated from the consolidated accounts so that the figures for the group as a whole are correct. In some cases, you can do this simply by using the same Account as the Sales Account in one Daughter and as the Cost Account in the second Daughter. If this is not possible, you can eliminate the balances of Accounts used for this purpose using the 'Account Auto Elimination' Maintenance function.
Please click the links above for detailed descriptions of each step, for instructions for producing consolidated reports and detailed examples.