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Consolidation Settings

This page describes the Consolidation Settings setting in the Consolidation module.

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The Consolidation Settings setting is where you should specify which Currency is to be used as the reporting Currency in consolidated reports. This is known as the "Group Currency". The Group Currency must be in use as Base Currency 1 or Base Currency 2 in each Company. Follow these steps:

  1. Configure the Base Currency setting in the System module in each Company.

    If every Company has the same home Currency, specify that this Currency is Base Currency 1 in every Company.

    If the various Companies have different home Currencies, specify that these Currencies are Base Currency 1 in each Company as appropriate. Then choose the Currency that you would like to be used as the Group Currency. This can be the home Currency (Base Currency 1) in one of the Companies (perhaps it will be the home Currency in the Mother Currency), but need not be. In every Company where the Group Company is not the home Currency, specify that the Group Currency is Base Currency 2.

    An example configuration is illustrated below:

    In this example, the Euro is the home Currency in Daughter 2. It has been decided that the Euro will be the Group Currency and so it is Base Currency 2 in the other Companies.

  2. In each Company, use the Base Currency Rates setting in the System module to enter exchange rates between the two Base Currencies.

  3. In each Company in which there are two Base Currencies, use the Consolidation Settings setting to specify whether the Group Currency is Base Currency 1 or Base Currency 2:

    If every Company has the same home Currency, choose the Base Currency 1 option in every Company.

    If the various Companies have different home Currencies, specify in each Company which of the two Base Currencies is the Group Currency in that Company.

    For example, referring to the company structure illustrated earlier, the Base Currency 1 option will be selected in Daughter 2 (the Euro is Base Currency 1 in that Company), and the Base Currency 2 option will be selected in the other Companies (the Euro is Base Currency 2 in those Companies):

    CompanyBase Currency 1Base Currency 2Option in this setting
    MotherGBP (Pounds) EURBC2
    Daughter 1SEK (Swedish Kr) EURBC2
    Daughter 2EURBC1
    Grand DaughterNOK (Norwegian Kr) EURBC2
If you are using two Base Currencies in a Company, values in both Currencies will be stored in every Nominal Ledger Transaction.

When you produce a consolidated report from the Mother Company, values in the Group Currency will be sent to the report from each Daughter Company. Continuing the example, values in Base Currency 2 will be sent to the Mother from Daughter 1, and values in Base Currency 1 will be sent from Daughter 2. Because these are stored values, there will be no need for further Currency conversion when you produce a report.

In one report (the Trial Balance, Consolidated report), there is an option not to use the stored values. Instead, values in each Company's Base Currency 1 will be sent to the Mother Company, where they will be converted using Consolidation Exchange Rates to the Mother Company's Base Currency 1. You can set different Consolidation Exchange Rates for Profit & Loss Accounts (Income and Expense Accounts) and for Balance Sheet Accounts (Asset, Liability and Equity Accounts). Using this option will give the following results:

  • If Base Currency 1 in the Mother Company is the Group Currency, the figures in the report will be converted to the Group Currency from each Daughter Company's Base Currency 1 using the Consolidation Exchange Rates.

  • If Base Currency 1 in the Mother Company is not the Group Currency, the figures in the report will be converted to the Mother Company's Base Currency 1 from each Daughter Company's Base Currency 1 using the Consolidation Exchange Rates. In other words, the report will be in the Mother Company's Base Currency 1, not the Group Currency.
In both cases, if the Mother Company and a Daughter Company have the same Base Currency 1, stored figures from the Daughter Company will be used in the report without any further conversion.

If you want to use this option, carry out the following configuration steps:

  1. In the Consolidation module in the Mother Company, use the Consolidation Exchange Rates setting to enter exchange rates between the Mother Company's Base Currency 1 and each Daughter Company's Base Currency 1. Continuing the example, enter Consolidation Exchange Rates between GBP (Base Currency 1 in the Mother Company) and SEK (Base Currency 1 in Daughter 1), between GBP and EUR (Base Currency 1 in Daughter 2) and between GBP and NOK (Base Currency 1 in Grand Daughter).

    Be sure to enter separate exchange rates for Profit & Loss Accounts and for Balance Sheet Accounts, even if those exchange rates are the same. The exchange rates that you enter should be within the minimum and maximum rates specified for the Currency.

  2. In the Consolidation Settings setting in each Daughter Company, enter the Company Code of the Mother Company:

  3. In the Consolidation Settings setting in the Mother Company, use the Reporting Exchange Rates options to specify whether the Transaction Exchange Rate option or the Consolidation Exchange Rate option should be selected by default when you run the Trial Balance, Consolidated report.

    The Reporting Exchange Rates options will affect the Trial Balance, Consolidated report as follows:

    Transaction Exchange Rate
    Stored values in the Group Currency will be sent to the report from each Daughter Company. Consolidation Exchange Rates will not be used.

    Consolidation Exchange Rate
    Values in each Daughter Company's Base Currency 1 will be sent to the report and converted to the Mother Company's Base Currency 1 using the Consolidation Exchange Rates.
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Settings in the Consolidation module:

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