When doing a financial consolidation, financial data from different companies need to be combined in a single “consolidation” report. As the data that need to be consolidated are often based on different Chart of Accounts (COA), the question arises how ledger accounts from different COA’s can be combined into a single consolidation report. This question will be answered in the following based on a simplified example.
The financial data of company DEMF and BRMF need to be consolidated. While the first company (DEMF) uses a “shared” COA, the second company (BRMF) uses a local Brazilian COA. What makes things even more complex is that company DEMF records all transactions in EUR-currency, while company BRMF keeps all its books in Brazilian reals. The next screenshot shows you the COA’s and currencies setup for the two companies.
In order keep the example as simple as possible, only the bank accounts of both companies are considered for the following illustrations.
In company DEMF only one single transaction with a total amount of 10000 EUR has been recorded on bank account (main account) “110200”.
In company BRMF two local currency transactions have been recorded on the bank account (main account) “22.214.171.124.02”.
The exchange rate used for consolidation purposes is 300 BRL / 100 EUR.
Against the background of those data, a financial consolidation report should show a total balance of 50000 EUR or 150000 BRL in the bank accounts line.
To realize this, the following setup has been done in Management Reporter.
Step 1: Setup of the row definition
The first step in setting up the consolidation report is mapping the different main accounts in the row definition of the report. This mapping in done by specifying separate row links that hold the main account information of both companies. Please see the following screenshot for an example.
Step 2: Setup of the reporting tree Definition
The next step is setting up a reporting tree. When doing this setup, you have to make sure that a reference is made between the different companies and the row definition / row links established in the first step.
Step 3: Setup of the column Definition
The third step is setting up a column definition as illustrated in the next screenshot.
Please note that you need to link the different columns with the reporting tree elements if you want to report on the different legal entities.
Step 4: Setup of the report Definition
The last step in the report generation is the combination of all previous elements (row definition, reporting tree and column definition) into a report. Please note that you need to select the reporting currency check box before running the report if you want to do a currency conversion once the report that gets generated.